You're reading: Belarus proposes 20% rate hike for Russian oil transshipments

Belarus and Russia are beginning negotiations on a possible increase of tariffs for Russian oil transshipments to Europe in 2012, a source familiar with the talks told Interfax.

He said Russia has received a proposal from Belarus to increase the tariff by 20%, but the size of the increase will still be discussed.

The Energy Ministry confirmed this information. However, a ministry spokesman said that the countries now have a special method for the calculation of oil transshipment tariffs.

"According to it, any change in the tariff for transshipment of Russian oil through Belarus must be economically rationalized. The issue will be decided in accordance with the existing method," he said.

The spokesman also said that Russia and Belarus have already agreed on an indicative oil balance, according to which Russia will supply 21.5 million tonnes of oil to Belarus by pipeline. Rail transport can be used for these shipments, but only if oil deliveries by pipeline are reduced.

"Considering that the planned amount of deliveries combined with Belarus’ own production – 23.5 million tonnes in total – is approximately equal to the capacity of Belarusian oil refineries, one can say that shipments by rail transport are possible if there is a decline in deliveries via the pipeline system," he said.

The agreement with Russian pipeline monopoly Transneft regulating both transhipments and oil shipments by pipeline to Belarusian refineries expires on Feb. 1, 2012.

On Feb. 1, 2010, Belarus converted tariffs for pumping oil through its territory to the Russian ruble and increased it 11%.

The recalculation of tariffs was done in accordance with a method for changing them for transport services that was part of a package of documents setting terms for shipments of Russian oil to Belarus inked January 27 in Moscow. Previously, tariffs for oil-pumping across Belarusian territory were calculated in euros.

Since this past Feb. 1, the transit tariff for Russian oil in Belarus was increased 12.5%. The tariffs for transporting oil to refineries in the republic were also raised the same amount.

As per intergovernmental agreements, a non-scheduled reconsideration of tariffs can take place if there are substantial changes in the business conditions for pipeline transport in Belarus. Reconsideration can take place until Oct. 1.

In 2011, the OJSC Gomeltransneft Druzhba trunk pipeline system will carry 72.3 million tonnes of oil, with some 9 million tonnes going to Mozyr Oil Refinery. There was 75.5 million tonnes transported last year via this line and 79.6 million tonnes the year before.

There are a northern and a southern Druzhba pipeline stretch in Belarus. Via the northern section, operated by OJSC Polotsktransneft Druzhba, oil is delivered only to OJSC Naftan.

Gomeltransneft Druzhba, the southern section, moves Russian and Kazakh oil through Belarus to Poland and Germany, as well as to Ukraine, Hungary, Slovakia, and the Czech Republic.

It also transports Russian and Belarusian oil to the Mozyr refinery. Transit amounts to roughly 75-80 million tonnes per year.