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Russia and Belarus have agreed the transit price

Date of publication: 24 January 2018 Printable version

The cost of oil transit from Russia through Belarus will increase by 6.7% in 2018. The indexation rate was calculated according to the method approved by the countries, as their views of the tariff growth varied: Transneft offered 4% and Minsk requested 7.6%. Next year Moscow is going to change the transportation pricing system in view of the dramatically reduced inflation in Russia, the rate of which is taken as a tariff base.

Belarus approved the indexation rate in respect of tariffs for transit of Russian oil through its territory since 1 February. According to the Decree of Ministry of Antimonopoly Regulation and Trade, the cost of transportation of raw materials through the trunk pipelines of Gomeltransneft Druzhba along the Unecha (Vysokoe) – Adamova Zastava route and the Unecha (Vysokoe) – Brody was increased by 6.7% up to 307.19 Rubles and 131.95 Rubles per ton excluding VAT, respectively. At the same time, according to Transneft, at first Minsk offered to increase the tariffs by 7.6%.

“During the negotiations we offered them 4%, just as much as we had (3.95%). They did not agree, so, the rule of the method approved by both parties was used: the average annual inflation rate (3.7%) + 3% = 6.7%,” the company representatives stated. “Moscow had to agree to that rate, but later the calculation method for 2019 is to be reviewed, as the current version was worked out when the inflation rate was about 10% per month and now it is about 4%”.

This year the process of tariff approval has been relatively rapid and easy as compared to 2016, when the parties could not come to an agreement during several months. But at that time the controversy concerning indexation of the price for Russian oil transit was directly related to negotiations about the cost of gas for Belarus. Thus, trying to put pressure on Moscow, Minsk threatened to increase the cost of transportation by 50% since October 2016. But finally the countries agreed to restore the volume of duty-free oil deliveries to the republic and to increase the tariff for Gomeltransneft Druzhba by 7.7% since 1 February 2017 and for Polotsktransneft Druzhba by 11.76%.

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