Page 19 - bne_newspaper_November_23_2018

Eastern Europe
November 23, 2018 www.intellinews.com I Page 19
Belarus faces new crisis as "little progress" secured in oil and gas price talks with Moscow
IntelliNews Pro
Cash-strapped Belarus sees little progress in crucially important oil and gas price talks with Russia, according to the nation's newly-appointed ambassador to Russia Vladimir Semashko.
"The oil and gas negotiations have brought little progress," the diplomat, who was responsible for energy negotiations with Russia as the first deputy premier until recently, said in a televised interview. "We will have to work further... The talks have been difficult."
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 a new financial crisis, which could be triggered by Russia's expected tax manoeuvre, which envisages a grad- ual 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 are estimated at
BYN600mn ($300mn), and the losses might total $2bn by the end of 2024.
Belarus’ foreign exchange reserves increased by $181.3mn, or 2.6% month-on-month, to $7.108bn in October. However, a significant part of the reserves was created by bonds issued
by the National Bank of Belarus (NBB), which
the regulator should repay within the next 12 months. The bondholders of these notes are local commercial banks.
Earlier, the nation's Prime Minister Sergei Rumas said that Minsk and Moscow would agree on a compensation scheme before the end of this year.
"The Russian government also understands that the consequences of the manoeuvre will affect Belarus’ budget revenue and its petrochemical companies," BelaPAN news agency quoted him as saying. "The Belarusian side believes it would be correct if this compensation were [in the form of
a reduction] in the price of oil supplied to Belarus. We have been tasked by the heads of state with negotiating this matter and submitting a specific mechanism for their consideration before the end of the year."