Business News

Gazprom threatens Belarus to reduce gas supplies

Aug 1, 2007, 11:27 GMT

Moscow - Russia and Belarus were heading for renewed conflict over energy supplies on Wednesday as Russian gas monopoly Gazprom said it would reduce gas supplies to its neighbour by 45 per cent from Friday, the Interfax news agency reported.

Belarus had only paid for about half the gas exports of the first six months in 2007, the Gazprom leadership said in a letter to Belarusian gas company Beltransgas.

About one fifth of Russian gas exports to Europe transit Belarus.

According to Gazprom, Western customers had been told about the planned reduction of supplies.

Russia and Belarus previously clashed over energy supplies at the beginning of 2007.

While a complete stoppage of gas supplies to Belarus was avoided, Russia reduced its supplies of oil for several days - a decision which also affected the transit pipeline into the European Union.

The cause of the conflict is Moscow's attempt to raise step by step the strongly subsidized energy prices for Belarus to an international level.

A doubling of gas prices had caused Minsk to seriously fall behind with its payments in recent months.