Reuters: RF Put On Hold Duty-Free Supply Of Oil Products And Loans To Belarus

Russia starts to limit the duty-free supplies of petroleum products to Belarus.

To achieve this goal, the Russian Federation has stopped the provision of loans to Minsk and the negotiations on state loans for $ 1 billion, Reuters reports with reference to the protocol on changes to the bilateral agreement and an explanatory note of Belnautakhim, interfax.by reports.

"The Russian side has initiated the discontinuation of practice of unhindered export of petroleum products from the Russian Federation to the Republic of Belarus, motivating it by the losses of the Russian budget in the face of the increasing export," - Reuters quotes Belnautakhim deputy chairman Andrei Rybakou's explanatory note to the protocol on changes in the intergovernmental agreement.

For this reason, "the transfer of two tranches of the Eurasian Stabilization and Development Fund to Belarus was temporarily blocked, the procedure on granting Belarus a state loan of up to $ 1 billion in 2019 was suspended."

According to Reuters, Moscow insists on compensation for previously supplied petroleum products to Belarus. "... the Russian side links the continuation of further cooperation with the decision to establish a ban on the export of oil products from Russia to the Republic of Belarus and compensation for losses of the Russian budget for previously exported petroleum products," -Rybakou's note says.

The Ministry of Finance of Belarus refuses to comment on this topic. The press service of the Council of Ministers of Belarus also does not comment on this message.

Reuters reports that according to amendments to the bilateral intergovernmental agreement, prepared by the joint working group for approval by the governments of both countries, the document proposes to introduce an indicative balance of deliveries of oil products: gasoline, diesel fuel, fuel oil, which is agreed by the state departments before October 1 of each current year for the next calendar year.

The new version of the intergovernmental agreement provides for the introduction of a ban on the export of oil, oil products and other goods that exceed the indicative balance.

The ban on export from Russia to Belarus applies to goods for which indicative balances have been agreed, as well as to straight-run gasolines, medium distillates and dark oil products - from September 1, 2018; to other goods (bitumen, benzene and others) - from October 1, 2018.

According to Belstat, in January-May, 2018, Belarus imported oil products from Russia for $ 677.6 million, which was 1.9 times more than in the same period in 2017. The import of oil increased by 37.6% up to $ 2.8 billion.

In accordance with intergovernmental agreements, Belarus de jure can import from Russia 24 million tons of oil per year. At the same time, Minsk imports 18 million tons of oil for processing. The parties have agreed that the export duties for the remaining 6 million tons are sent to the Belarusian budget.

In 2016, the Council of the Eurasian Stabilization and Development Fund decided to grant Belarus a $ 2 billion financial loan in the form of seven tranches in 2016-2018. Minsk has already received five tranches for $ 1.6 billion. Two tranches for $ 200 million have not been provided yet.

Earlier, Belarus initiated negotiations with the Russian Federation on the provision of a new state loan amounting to $ 1 billion to refinance the funds, earlier raised in Russia, amounting to about $ 6.3 billion (more than 38% of the total foreign debt of Belarus).