Economist on Belarus-Russia gas dispute: We can haggle benefits for 2017

Economist on Belarus-Russia gas dispute: We can haggle benefits for 2017

For Hong Kong Belarusian kvass is like carbonated soy sauce, and in relations with Russia kvass could remind of "carbonated oil" (or gas). It is time to fix the oil and gas dispute. Last week, Belarus made another step in resolving the conflict and made an advance payment for gas. This is the official information from the government.

Russia pays for Belarusian products in rubles, but Belarus pays for Russian energy in US dollars. The weakening of the Russian currency was to influence the price of gas supplied to Belarus. The debates on this have not stopped since the beginning of 2016.

Valery Polkhovsky, financial analyst:
Neither party benefits. Belarus is also suffering losses because it receives less oil to its refineries than planned. We know that the feature of oil refining industry is that production facilities need to be loaded all the time, otherwise you may incur serious additional losses.

In October, Minsk and Moscow finally agreed. Belarus promised to repay the underpayment of $280 million dollars, and Russia to resume oil supplies.

But there has been a slight pause again. It was found that a number of issues at the intergovernmental level do not allow resolving the oil and gas deadlock. Yet Minsk shows signs that both need to finish the dispute: Belarusians have paid in advance for Russian gas.

Irina Novikova, Doctor of Economics:
Let's negotiate. Russia will lower its prices for Europe, because they want to stop the supply of liquefied natural gas from the USA. Therefore, Belarus needs to get some benefits for 2017, too.

The next round of negotiations may resolve the dispute. According to the Russian government, Moscow is ready to consider the Belarusian proposal to pay. Minsk, in turn, is waiting for reciprocal steps.