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The position of Russian oil companies devalues the achievements in the construction of the union state

The position of Russian oil companies, which refuse to supply oil to Belarus without a premium to the supply price, devalues the achievements in the construction of the Union State and the plans for deeper integration, said Anton Dudarenok, an analyst at the Belarusian State Institute for Strategic Research (BISR).

"The tax maneuver and the associated attempts of Russian oil companies to take advantage of a part of the allied benefits, in fact, set back the process of the Union State’s building and the path that our peoples have made over the past two decades", Dudarenok told Interfax-Zapad, commenting on the situation with supplies of crude oil to Belarus.

In his opinion, the fundamental issue for Minsk is a sharp increase in the cost of oil supplies due to the implementation of the tax maneuver in the oil sector. The expert noted that President of Belarus Alexander Lukashenko announced Russia’s intention to supply oil to the republic at prices higher than world prices. "Disagreement and conflict with Russia occurred because we were required to pay more for oil than the world price", Lukashenko said on Friday in Shklov.

Dudarenok explained that “if we compare oil prices in absolute terms and do not take into account the conditions that our governments reached within the framework of the agreements on the Union State, then the cost of oil for Belarus exceeded world prices in 2019 by an average of $ 15 per ton…".

The expert explained that in 2019 the average world oil price was about $ 450 per ton, and the export duty on oil was $80. Without taking into account the export duty, the price for Belarus should be $370 per ton, but "Russian oilmen added $15 to this figure and sold oil to Belarusian refineries at $385".

He recalled that in connection with the implementation of the tax maneuver in the Russian Federation, the price of oil supplies to Belarus increased by $ 20 per ton. Thus, "under the new conditions, while maintaining the premium for Russian companies, Belarus will buy oil at a price that is higher than in the world by $35, excluding export duties".

The expert also stressed that the absence of export duties on oil supplies to Belarus "is not the goodwill of the oil companies - it is the result of the integration agreements between Belarus and Russia, where goods between the participating countries are moved without paying customs duties".

According to the expert, oil was traditionally supplied to Belarus by a limited number of large companies - Rosneft, Lukoil, Surgutneftegaz, Gazprom Neft, Tatneft, Zarubezhneft. "Other companies with smaller volumes, in accordance with the legislation of the Russian Federation, cannot get access to the "pipe". Using their exclusive right, these supplying companies dictate their price, which is significantly higher than for neighboring foreign countries and Russian refineries", the expert emphasized. In his opinion, "de facto Belarus faces an oligopolistic conspiracy, which should be the subject of consideration by the antimonopoly departments of the two countries".

In addition, Dudarenok recalled that under the current conditions, Russian oil refiners are in more favorable conditions than Belarusian ones. "The negative consequences of the tax reform in the Russian oil industry are removed for them due to compensatory mechanisms. First of all, this is a negative excise tax (i.e. a tax deduction to keep fuel prices growing) and a damping coefficient (or the difference between domestic and export oil prices), as well as some other indirect preferences that reduce their estimated damage to a minimum”, the expert explained. Meanwhile, “Belarusian oil refiners are unfortunately deprived of such tools", he stated.

In his opinion, against the background of periodically arising conflicts with the Russian Federation in the sphere of energy resources trade, their alternative import for Belarus is "a vital necessity". "Providing an energy security cushion allows any country to avoid both the consequences of accidental incidents and deliberate economic traps when purchasing certain critical resources", the analyst stressed.

Meanwhile, he is sure that "even if purchases of oil from several sources will cost Belarus more in quantitative terms, strategically this is a more advantageous option, and here the key point is not the cost of oil, but the need to preserve energy and political sovereignty".

As reported, Moscow and Minsk did not sign an agreement on the terms of oil supplies in 2020, Russia stopped oil supplies to Belarusian refineries from 1 January, although supplies were partially resumed by the oil companies of the Safmar Group of Mikhail Gutseriyev from 4 January.

The Belarusian authorities reported that they had sent proposals on oil imports to the Baltic countries, Poland, Ukraine, Kazakhstan and Azerbaijan.

On 21 January, Belarusian President Alexander Lukashenko announced that the country will strive to ensure that oil imported from Russia makes up 30-40% of the total demand, and 30% of oil must be imported through the Baltic countries and Ukraine.

Last year Belarus imported 17.6 million tons of oil from Russia.

On 22 January, Internet media reported on the statement of the head of the Lukoil company Vagit Alekperov that Lukoil did not intend to resume supplies on preferential terms and compensate for the losses of Belarus due to the tax maneuver in the oil industry.

On the eve of the Russian Ambassador to Belarus Dmitry Mezentsev said that Moscow and Minsk could agree on the terms of supply of energy resources in the near future. He also announced that an agreement had been reached at the level of the governments of the two countries on a mechanism for compensating the Belarusian side for the losses incurred due to the delivery of oil contaminated with chlorides from Russia in April last year.