Jan 12, 2021
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Lukashenka “capitulates” to the Kremlin. How long?

Lukashenka “capitulates” to the Kremlin.  How long?

Photo: Leonid Scheglov / TASS

The price of Russian natural gas for Belarus in 2021 will be $ 128.5 per thousand cubic meters, the president of this country said. Alexander Lukashenko

“128.5 (dollars). But I’m rounding up, 130, ”he said.

At the same time, the Belarusian leader believes that the price of Russian natural gas could be “more fair”.

“I think that this price in the conditions of our relations could be more fair, let’s say,” Lukashenka noted.

At the same time, according to him, he did not discuss this issue with his Russian counterpart Vladimir Putin and does not intend to initiate this dialogue.

“If you decide so, so be it,” he concluded.

In addition, Lukashenka announced the need for a currency union with Russia. He drew attention to the fact that now the study on the creation of the association is not being conducted.

“There was no deep study of the currency union. Initially, the Russian President and I decided that a monetary union, a single currency, and so on is the crown. We must come to this, ”Lukashenka said.

He stressed that the central banks of the countries unanimously stated that “there are no problems here.” According to Lukashenka, it is necessary to expand integration with Russia in all directions and create equal conditions for people and business entities within the Union State.

He noted that people see that the leadership of the two states has been “telepathic” for thirty years on this issue in one place and therefore ask the question: “Why?”.

Lukashenka also called for equal conditions for people and business entities within the Union State.

“If conditions are equal, we can make significant and rapid progress,” he stressed.

As a reminder, at the end of December 2020 Gazprom announced the signing of a protocol on the procedure for setting prices for gas supplies to Belarus in 2021, while the price was not specified. Later, the Ministry of Energy of Belarus said that it would be practically at the level of 2020.

The price in 2020 was $ 127 per thousand cubic meters, but the Belarusian side insisted on lowering it.

Is $ 128.5 a lot?

– Against the background of current wholesale prices in Europe – very little, – considers Deputy Director General of the Institute of National Energy Alexander Frolov

– In principle, the procedure for determining the price is spelled out in the relevant intergovernmental agreement, a small change in prices should not be surprising.

Belarus always demands a cut in gas prices as soon as wholesale prices in Europe fall below the $ 150 mark. Then the reasons for loud indignation disappear by themselves. We have just such a case.

“SP”: – At the same time, Lukashenko believes that the price of Russian natural gas could be “more fair”. What is the “fair” price for him?

– Belarus proceeds from earlier agreements with Russia, in which it was assumed that after a while the gas price for it would be formed according to the formula “price of the Smolensk region plus transportation costs”. But this agreement was reached at a time when the government of our country was going to gradually bring the tariff for domestic consumers to the level of export parity. However, during the crisis of 2008-2010, when the welfare of the population, to put it mildly, stopped growing at the same rate, these plans were abandoned. Until now, tariffs are regulated by the state.

In mid-2020, when European quotes plummeted to unprecedented lows, the idea that the price for the population in Russia turned out to be twice as high was hotly discussed. They say that we, the citizens of Russia, would receive gas at such a price. Let’s omit the question of the legality of comparing spot quotes and tariffs for the end user. Let’s imagine it makes any sense (it doesn’t really). But following this logic, at the moment the population of our country would pay for gas two and a half more than it pays in the price reality regulated by the state. And, by the way, if we had export parity, any decrease in the ruble against the dollar would hit the wallet of an ordinary consumer.

Without export parity, it makes no economic sense to tie the price for Belarus to the price of the Smolensk region. In any case, for our country. For Minsk, the opposite is true. They believe that this is the fair price.

“SP”: – Previously, he wanted a price like in Europe. What’s in Europe now? Maybe do it like in Europe?

– It seems to me that some not very clever adviser advised Alexander Grigorievich. I believe that Gazprom would not refuse to sell gas to Belarus on a European basis.

“SP”: – To what extent do you think Lukashenka has lost the room for maneuver in trading both in gas and oil after the elections?

– I do not see any unexpected turns in this confrontation. It developed in the same way as the two previous ones.

– Where did these $ 1.50 from above come from – I don’t know, I won’t guess, – says expert of the analytical portal Alexey Ilyashevich

– But we can state that the price, in fact, has remained the same. This is in line with Russia’s original negotiating positions. As far as I remember, Moscow was just about to fix the price for Belarus at the level of 2020.

“SP”: – Lukashenko all last year demanded a price reduction. And then, in fact, an increase. Has Lukashenka Moderated Appetites? Due to the situation on the gas market or for political reasons?

– 50-50. On the one hand, Lukashenko is now really in a weak position – he needs the support of Russia. This leaves an imprint on the negotiation process. Do you remember that in the summer the media wrote that Belarus does not recognize debts for the supplied gas to Gazprom? There was a lot of noise. And then Old Man quietly took a loan from the Eurasian Fund for Stabilization and Development and allocated $ 200 million from it to pay off the debt. That’s all.
On the other hand, the market situation is also changing. Blue fuel rises in price against the background of a cold snap. The gas price at the Dutch hub TTF reached $ 258, the highest value in 23 months.

You need to understand that 2020 was a real nightmare for Gazprom. Due to the coronavirus, an abnormally warm winter and huge gas reserves in Europe, which have been accumulated due to fears of the termination of Ukrainian transit. Spot prices dropped significantly below $ 127 (which is why Lukashenka was indignant). And this year they will probably be higher. Therefore, $ 128.5 per thousand cubic meters in 2021 is even more profitable for Belarus than $ 127 in 2020. This is the math.

“SP”: – Lukashenka urged “not to telepathically” on the issue of integration of Russia and Belarus. What does it mean? Integration will really intensify now, or is it just words?

– This is a rhetorical question. Alexander Grigorievich is generally a great fan of talking, speculating about how important it is to build a real Union State. In reality, everything depends on the position of Minsk. Let’s be honest: it is impossible to observe the principle of equality of the parties in an alliance between such disproportionate countries. Either Belarus will sacrifice part of its sovereignty in favor of the Union State, which in fact will be ruled by Russia, or there will be no integration.

“SP”: – Lukashenko also spoke about the need for a currency union with Russia. What does it mean? Is the key issue of creating the Union State close to a solution?

– He said that a monetary union is needed in the future. Now this issue is not on the agenda, it is not being worked out. When it comes to such global issues, I can say one word: roaming. Russia and Belarus still cannot agree on canceling roaming. So what kind of monetary union can we talk about?

“SP”: – At the same time, Lukashenka reads that the price of Russian natural gas could be “more fair”. That is, the struggle is not over? Will oil and gas disputes continue? To what extent will deepening integration contribute to their solution?

– This is an eternal story. Can you imagine Lukashenka completely satisfied with the prices for hydrocarbons? So I can’t. By the way, I have always been impressed by this trait of his character. Belarus is not Lithuania, which will lease an expensive LNG terminal and import expensive fuel through it, just to annoy Gazprom. Lukashenka has an understanding of his national interests. But the problem is that the multi-vector policy is becoming obsolete. Belarus will have to make a choice, otherwise it will simply be torn apart. They are already tearing apart.

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