Belarus, Russia agree on oil supplies, export duties

May 30, 2014

Belarus and Russia have agreed on the amount of oil supplies and the new order of paying export duties on oil products. The relevant documents were signed in Astana on 29 May, BelTA has learned.

In particular, the parties signed the protocol amending the agreement on trade and economic cooperation in the field of the export of oil and oil products, and the protocol amending the agreement on the order of payment of export customs duties on crude oil and some oil products exported from the Republic of Belarus outside the customs territory of the Customs Union. On behalf of Belarus the documents were signed by member of the Council of the Eurasian Economic Commission Sergei Rumas.

In 2015 some $1.5 billion of export duties on oil products made from Russian oil and exported from Belarus will be credited to the Belarusian budget, Deputy Finance Minister of Belarus Dmitry Kiyko told reporters after the signing ceremony. "Until 2015, including 2014, the Republic of Belarus will continue making such transfers to the budget of the Russian Federation in full amount. Each year, this amount ranges from $3.5 billion to $4 billion,” he said.

According to Dmitry Kiyko, the arrangement is designed for a long-term period, virtually until the parties create the single market for oil and oil products. "There is a very flexible mechanism to review the ceiling amounts. The Belarusian side views this mechanism as a possibility to phase out transfers of export duties to the Russian budget, "said the deputy minister.

However, Dmitry Kiyko noted that Belarus was seeking complete abolition of these transfers to the budget of the Russian Federation starting from 2015, which is implied by the very idea of the Eurasian Economic Union. “But, since the matter is sensitive enough for Belarus and Russia, the formation of the common market has been delayed for quite a long period. We regard the amount of $1.5 billion as the first phase of the cooperation without these exemptions," he said.

Acting Deputy Chairman of the Board of Belneftekhim Concern Vladimir Sizov commented on the agreements on the supply of oil. “It was very important for us to agree on the amount of oil supplies during the transition period as we want to utilize our oil refiners at full capacity, have a reasonable price in the domestic market and ensure the budget revenues through the export of oil products,” he said.

According to Vladimir Sizov, the bilateral arrangement regulates the volume of oil deliveries to the Belarusian oil refineries. In 2015, the total supply will reach 23 million tonnes, including 22 million tonnes by the pipeline transport. In the following years, the supplies will increase to 24 million tonnes, of which 23 million tonnes will be delivered by the pipeline transport.

Copyright: BelTA, 2014