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EASTWEEK
Weekly analytical newsletter on Russia, Ukraine, Belarus, the Caucasus and Central Asia (also available in Polish as Tydzień na Wschodzie)

Contents

No. 5(198) | 2010-02-03
Also available in PDF

Analyses

  • Moscow's policy breeds frustration in Kaliningrad

    The underlying cause of the protest came from Moscow's long-term policy of prioritising Kaliningrad's integration with Russia while attaching secondary importance to the region's development. The policy of centralisation (which has been adversely affecting the region), as well as the changes to the functioning of the Special Economic Zone (which have harmed the interests of the local elite) have caused particular discontent. 

  • Romanian project for European integration of Moldova

    Since the formation of a new pro-European government in Chisinau, which is favourably disposed towards Romania, Bucharest has made Moldova the priority of its foreign policy and adopted a more tangible agenda with regard to it.

Events

 

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Is Russia getting closer to taking over Belarusian refineries?
EASTWEEK

2010-02-03 | Anna Maria Dyner

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Following lengthy negotiations, on 27 January 2010 Russia and Belarus reached an agreement with regard to co-operation on the export of oil and petroleum products. The agreement ends the heated dispute between the two countries about the extent to which oil processed by Belarusian refineries should be exempted from Russian export duties. By limiting the scope of the exemption, Moscow hopes to force Minsk to sell its controlling stakes in the refineries.

The protocol signed by the parties states that the exemption will apply to 6.3 million tons of oil destined for the Belarusian market, as well as the oil processed by the Belarusian refineries and sent to Russia in the form of petroleum products. On the other hand, however, the oil to be processed and exported to the West as petroleum products will be subject to the full duty. The agreement is therefore much less favourable to the Belarusian economy than the conditions in force between 2007 and 2009 had been. It will drive down the profitability of the Belarusian refineries and the revenues of the Belarusian budget, and force Belarus to contract a new foreign loan.
Due to the terms of the agreement and the fact that Belarus has only a limited capacity to re-negotiate it, the Russian companies are now more likely to take over the Belarusian petrochemical plants; should that happen, the consequences would include an erosion of Belarusian President Lukashenka's power and a deepening of his dependence on Moscow. <dyn>

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