Thaindian News

MOSCOW, RUSSIA (BNO NEWS) — Russia on Tuesday announced the resuming of oil deliveries to Belarus after the two countries agreed on oil price, RIA Novosti reported.

Russia’s state-controlled oil pipeline monopoly Transneft informed that Belarus and Russia agreed on oil price but LUKoil, Russia’s second largest oil producer, said it has not been informed on such agreement.

LUKoil is the main oil supplier of Belarus. The oil deliveries were stopped in late December after the two countries did not agree on oil price.

In 2010, Russia introduced oil export duties to Belarus to prevent the former Soviet state from re-exporting Russian oil derivatives to the European Union.

Russia and Belarus then signed a common economic space agreement in early December. Under such agreement, Russia canceled the duties starting on January 1 on condition that Minsk returned to Moscow all duties received from selling refined oil.

“We are cancelling all oil duties in mutual trade. We will supply oil duty-free to Belarus, while duties on oil products will be charged on external borders and transferred to the Russian budget,” said Russia’s Economic Development Minister Elvira Nabiullina in December.

The agreement was ratified by the Belarusian parliament on December 21. It is expected that oil supplies to Belarus will amount to 21.7 million metric tons in 2011.

The decision to cancel the oil duties will save Belarus approximately $4 million. The common economic space originated in June 2009 as the Prime Ministers of Russia, Belarus and Kazakhstan decided to join the WTO as a single customs territory. However, the initiative failed after the three countries had different degrees of readiness for membership.