Page 6 - BELRptDec18

2.0 Politics
2.1 Belarus decreases petrol imports from Russia as crisis looms
Belarus decreased imports of petroleum products from Russia in September to the lowest monthly level in 2018 - to 106,000 tonnes - amid an ongoing energy and financial conflict, which could badly hit the nation's battered state finances.
Belarus imported 141,900 tonnes of petroleum products in August, 237,000 tonnes in July and 300,000 to 400,000 tonnes a month in the first half of the year, according to BelaPAN news agency.
Recently, Belarus urged Russia not to cancel exports of petroleum products to Belarus , which Moscow argues are not economically viable. As part of Russia’s belt tightening it has been cutting back on the de facto subsides it grants Belarus in the form of low oil prices and below-market export tariffs this year.
The Russian government is about to implement a crushing change for Belarus' battered state budget by cancelling exports of petroleum products. According to Russian Energy Minister Alexander Novak, "The indicative balance [of petroleum products exports] envisages zero figures for the supply of petroleum products from Russia to Belarus". He added that Belarus is able to fully supply itself with its own petroleum products refined from crude oil from Russia.
Minsk’s newly-appointed ambassador to Russia Vladimir Semashko said in November that the oil and gas negotiations with Moscow have brought little progress so far .
At the same time, Minsk and Moscow seek to secure energy deal by December 15. "There are doubts as to whether [an agreement will be reached] by December 15, but we will agree sooner or later," he added amid growing worries in Minsk about new financial crisis, which could be triggered by Russia's expected tax manoeuvre.
The manoeuvre envisages a gradual reduction in the rate of export duty on oil and petroleum products from 30 % to zero in the period from 2019 to 2024 and a proportionate increase in mineral extraction tax on oil production.
According to the Belarusian finance ministry, the country’s budget revenue losses from the tax manoeuvre in 2019 alone were estimated at BYN600mn ($300mn), and that the losses might total $2bn by the end of 2024.
2.2 Eurotorg cancels IPO due to poor market
Leading Belarusian supermarket chain Eurotorg (aka Euroopt) has postponed what would have been the small northern republic’s first ever IPO that was due to be floated on the London Stock Exchange (LSE) blaming poor market conditions, the company announced on November 6.
“Eurotorg Holding Plc, the largest grocery retailer in Belarus, today announces that it has postponed its planned IPO on the London Stock Exchange, due to current market conditions. Despite significant interest in the business from investors, Eurotorg has decided to pursue its IPO when capital markets conditions become more favourable for emerging markets,” the company said in a press release.
6 BELARUS Country Report December 2018 www.intellinews.com