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Belarus: Moscow And Minsk Back Down From Gas Crisis As Temporary Supplies Resume

Prague, 19 February 2004 (RFE/RL) -- Russian energy officials today announced they are resuming short-term gas supplies to Belarus, temporarily easing a severe political crisis between Moscow and Minsk following yesterday's cut-off.

Belarus' Beltransgaz said gas supplies have already been restored in the country. Vladimir Kondrachuk, director-general of Russia's TransNafta gas-delivery firm, today told ITAR-TASS that an agreement between the two countries allowed for the immediate resumption of supplies at precrisis rates.

Kondrachuk says the deal will cover Belarus' estimated energy needs until the end of the month. TransNafta, along with Itera and Gazprom, halted deliveries of natural gas to Belarus after the two countries failed to strike an agreement on new price terms. Gazprom was the last to cut off supplies. It stopped the flow last night, citing unpaid bills.

Itera stopped providing gas last week, saying Belarus owed it $23.5 million. TransNafta cut off its deliveries yesterday morning and is waiting to be paid $12.1 million.

The Russian firms have sought to raise the rates for Belarus, which were below market levels. Officials in Minsk appear to have yielded to the demand, but have insisted Russia itself pay higher rates to transit gas supplies to Europe via Belarus. During an emergency meeting of the Belarusian government today, President Alyaksandr Lukashenka said Minsk is ready to pay Russia $50 per 1,000 cubic meters of gas, but wants to receive as much as Ukraine for transit deliveries to Poland, Germany, and other European countries.

Lukashenka said Belarus charges Russia only $0.50 (half a dollar) to transit 1,000 cubic meters of Russian gas, while Ukraine gets more than twice that ($1.09 per 1,000 cubic meters).

Belarusian officials also argued that Russian price hikes on gas supplies undermined bilateral agreements between the two capitals on joint price policies. But Lukashenka appeared ready to yield to the Russian demands saying that, if necessary, his country would dip into social welfare funds in order to pay its gas bills.

"Let them reproach us for not standing strong here, for giving up and so on. We should conclude an agreement on [Russian President Vladimir] Putin's terms. If Putin wants us to pay this money, let us try to collect it."

The uneasy accord follows a storm of criticism from the Belarusian government, which condemned as economic terrorism Russia's gas cut-off -- which comes as Belarus is suffering winter temperatures of minus 20 degrees Celsius. Minsk also recalled its ambassador to Moscow.

"Our relations with Russia will be poisoned by gas for a long time to come," Lukashenka said in a statement. Belarus is fully dependent on Russian energy supplies, and even a brief halt in deliveries could badly hurt the Belarusian economy. A complete shut-off of export deliveries through Belarus would also have a significant impact on European markets.

Valerii Nesterov, an analyst with the Moscow-based investment company Troika-Dialog, says the conflict is hurting both sides and should be solved by political means: "It's sad that this kind of thing has happened. A gas war is not naturally a method for solving problems. In general, nobody can benefit from this conflict. It looks that the time has come, in this case, for a political agreement."

Andrei Piontkovsky, a Russian political analyst, says the row over gas supplies prices will turn into a major political conflict that will deal the final blow to Russia-Belarus ties: "The gap [between Belarus and Russia] will be expanding quickly. And finally, Lukashenka will turn to the Western community, to immediate neighbors -- Lithuania, Poland -- and ask them to help save the freezing Belarusian population and idea of Belarusian independence."