Belarusian President Lukashenko threatens to break off alliance with Russia
Russia risks losing its “sole ally” in the west, Belarus, if it refuses to compensate Minsk for the losses arising from a Russian tax maneuver in the oil sector, Belarusian President Alexander Lukashenko told Interfax in an interview.
According to Lukashenko, if the monetary dispute with Russia’s leaders is not resolved, it will not be a catastrophe for Belarus.
The amount in question is in the region of $400 million per year, the amount that the Belarusian budget earns from the fact that Russian oil is sold in the country at a favorable price – without any export tariff, after which it is processed and resold in Russia as petrol and oil products.
This arrangement could be ruined by a new tax maneuver by Russia’s Finance Ministry, which proposes to drop the export tariff for all buyers of Russian oil, but to raise mineral tax instead.
As a result, the Belarusian State Concern for Oil and Chemistry estimates that oil will cost Belarus $20 more per ton, which will radically decrease the profitability of the Belarusian refineries.
During talks with Vladimir Putin in the Kremlin ahead of the New Year, to which Lukashenko brought four sacks of potatoes as a gift, the Belarusian President was unable to obtain compensation for the declining revenue.
“Don’t think that this is a catastrophe,” Lukashenko said on Thursday, commenting on the outcome of his meeting with Putin. “If Russia’s leadership chooses such a way forward and the loss of its sole ally in the western area, it’s their choice. We can’t force them,” he added.
“Earning an additional $400 million will not be a problem for Belarus,” Lukashenko believes. “According to parity of purchasing power, as is now the customary way of calculating, Belarus’s GDP is around $80 billion. What is the problem here? There isn’t one,” he said.
Lukashenko emphasized that any alliance between the countries could only take place as equals.
“If there is no equitable basis, there is no alliance. Everything must take place on an equitable basis, and for this, both nations must be willing – the Russian Federation and Belarus. And so, for many reasons, you understand yourself that there is no question of the two states unifying,” he said.
Moscow has also accumulated claims against Minsk, and trust has been lost, observed Russian Finance Minister Anton Siluanov on December 25: “Sanctions are heading our way, excisable goods – cigarettes, are filling our markets”.
In November, Lukashenko refused to authorized the deployment of a Russian aerospace base in Belarus, saying that it would create risks for Belarus and put Minsk “under a possible aggressor”.