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Negotiations between Russian President Vladimir Putin and his Belarusian counterpart Aleksandr Lukashenko ended unsuccessfully Dec. 15, as the two were unable to agree upon natural gas deliveries to Belarus for 2007 or any other issues of contention. Consequently, until a contract is concluded on its terms, the Russian state-controlled natural gas monopoly Gazprom could reduce supplies beginning Jan. 1, 2007 -- possibly affecting deliveries of natural gas to Europe.
Minsk is already under great pressure from Moscow, which wants to increase the price for natural gas from the current $46.68 to $200 per 1,000 cubic meters and impose a $24.65 per barrel duty on crude exports, both beginning in 2007. Belarus has no other sources of energy, except for a negligible amount it might obtain from Ukraine via Soviet-era pipelines. Belarus stands to lose almost $3 billion from the natural gas rate hikes and $1.7 to $2 billion from the crude duties, jeopardizing the government's bottom line and forcing the state to raise funds through the sale of assets.
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