Russia to cut oil product exports to Belarus

Petrochemical products are re-exported to Europe at the expense of the Russian budget

The Russian government is going to implement a ban on exports of refined oil products to Belarus, as it considers that the neighbouring country resells cheap energy to Europe. Belarus, which used to receive Russian crude and refined oil products duty-free, urges its partner to refrain from ''abrupt moves''.

Russia is planning to limit exports of refined oil products to Belarus in a bid to curtail re-exports from the country, says Reuters. Belarusian refineries receive around 18 million tonnes of crude oil from Russia annually. Actually, Russia is supporting its neighbour with cheap energy, as the supplies are not subject to export duties thanks to a joint customs zone.

Refined oil products from Russia are also currently free of duties for Belarus, and the supplies have increased considerably in the past few years. In the first half of 2018, the import volume increased by 44% to 2 million tonnes. At the same time, Belarus has constantly intensified re-exports of refined products to European countries, such as Poland and Germany.

According to Belneftekhim, Belarus' state energy company, Russia is imposing a ban on unlimited shipments of refined products to Belarus because ''it is facing lower budget revenues as volumes keep growing''. It was also announced that Russia had asked Belarus to compensate for its budget losses for past supplies of refined products.

Belneftekhim reported that Russia would claim compensation for its budget losses for past supplies. Photo: Neznayka

Meanwhile, Belarus urged Russia not to cancel exports of petroleum products to Belarus. ''Russia proposes to clarify the balance of oil products deliveries while no one questions the balance of oil supplies. This is a negotiation process. We insist on keeping the volume at the current level,'' Deputy Prime Minister of Belarus Igor Lyashenko said on Monday. ''We need stability,'' added the official. Energy resources reportedly accounted for half of all imports from Russia in the first six months of 2018. Belarus imported 9,09 million tonnes of oil worth $3,4 billion and 2,1 million tonnes of petroleum products worth $800 million, reports Minsk-based BelaPAN news agency.

Belarus is able to fully supply itself with its own petroleum products refined from crude oil from Russia, considers Minister of Energy of Russia Aleksandr Novak. Thus, ''the indicative balance [of petroleum products exports] envisages zero figures for the supply of petroleum products from Russia to Belarus'', said the minister.

By Anna Litvina

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