Belarus decides to raise tariff for Russian oil transit by a quarter
Belarus has notified the Russian company Transneft about its plans to raise oil transit tariffs by 23%, reports the RBC news agency with reference to Transneft’s President Nikolay Tokarev.
According to Tokarev, the proposal to increase the tariff for transporting oil via the Druzhba pipeline is a standard procedure.
“We have a methodology, a tariff is being agreed, and now the government will have a platform for negotiations,” said Tokarev. “23% increase is Minsk’s negotiation position and is quite controversial,” he noted.
The advisor to the President of Transneft, Igor Demin, informed reporters that from May 1, Belarus intends to raise the tariff for transporting oil through its part of the Druzhba pipeline. According to him, such a proposal was made with reference to the ecological situation in Belarus.
“They want to improve the environment at the expense of pipeline transit. If we do not agree with this increase, they will turn to the antitrust authority. The Federal Antimonopoly Services (FAS) of Russia and Belarus should hold these negotiations and agree on a formula-based increase,” said Demin.
The intergovernmental agreement between Russia and Belarus has been in force since 2010. It regulates tariffs for oil transit services through the main pipelines in Belarus. The agreement allows both planned and unscheduled revision of tariffs.
For an unscheduled revision of tariffs, Belarusian pipeline transport organizations must propose reasonable suggestions, which are then submitted for Russia’s approval.
If an agreement on the amount of the increase cannot be reached, then the countries’ competent authority, in particular, the FAS of Russia, determines the new tariff with the participation of the transport organizations.
In January 2019, Belarus carried out a planned 7.6% tariff increase. New tariffs entered into force on February 1, 2019. Prior to this, the planned increase (by 6.7%) took place in 2018.
Earlier, the Transneft Vice-President, Sergei Andronov, announced that in 2019, the volume of oil supplies from Russia to Belarus is planned to be maintained at 18 million tons, the same amount as in 2018. According to him, under an agreement with Russia, in total, 24 million tons of oil per year are delivered annually. Minsk uses 18 million tons for domestic consumption and processing and can re-sell the remaining 6 million tons to use the revenue for its national budget.