Belarus deputy PM to fly to Moscow to salvage oil tariffs accord with Russia

Russia-Belarus oil talks to continue

MINSK, Belarus — High-level officials from Belarus were flying to Moscow on Friday to salvage an accord with Russia on oil duties a day after the talks were broken off, heightening diplomatic tensions.

Russia is asking Belarus to pay full import duties on crude oil it refines and transits to the West, abolishing a current 65 percent discount. It has said that it is ready to provide tax-free oil for Belarus’ internal consumption, in line with an exisiting deal.

Experts estimate the new Russian demands represent a $5 billion increase in costs for the poor former Soviet satellite, which buys about 20 million metric tons of Russian crude annually. Belarus consumes about a quarter and ships the rest onward in a lucrative cargo worth more than a third of the country’s export revenues.

A delegation left Moscow after talks broke down late Thursday, though officials on both sides dismissed it as a hiccup.

Belarus’ First Deputy Prime Minister Vladimir Semashko was to arrive in Moscow for negotiations scheduled for Saturday, according to Belarusian government spokesman Alexander Timoshenko.

The stakes were initially raised earlier this week when Belarus threatened to cut off electricity to Russia’s western exclave of Kaliningrad in apparent retaliation at the duty hike.

There have so far been no long interruptions in oil supply to Belarus, allaying fears of a repeat of last year’s gas cutoff through Ukraine.

Irina Yesipova, a spokeswoman for Russia’s Energy Ministry, on Friday confirmed to The Associated Press that two days of negotiations in Moscow had ended late Thursday but “will continue at a distance.”

In Minsk, government spokesman Alexander Timoshenko told the AP that talks were continuing.

Neither disclosed the sticking points, but Belarus earlier accused Russia of “unprecendented pressure.”

Belarusian economic analyst Yaroslav Romanchuk said Minsk would cede little ground in the dispute as Russia wouldn’t want to risk appearing excessively overbearing.

Belarus said Sunday that Moscow’s demand that Belarus should pay a higher tax on the bulk of Russian oil shipment contradicted an agreement on customs union signed late last year.

Russia is the main ally and sponsor of Belarus, but relations between the two ex-Soviet neighbors have been increasingly strained by financial arguments. Belarusian President Alexander Lukashenko has accused the Kremlin of trying to subdue his country of 10 million people and to acquire key industrial assets.

Analysts including Valery Karbalevich, an expert with the Minsk-based Strategia independent think-tank, have said Moscow’s intention is to strong-arm Lukashenko into giving up controlling stakes in Belarusian oil refineries.

Associated Press writer David Nowak contributed to this report from Moscow.