Minsk demands Russia should recover losses that Belarus may suffer due to the upcoming rise in the price of imported crude oil.
Belarus insists on compensating losses it will face after Russia introduces the so-called tax maneuver, Deputy Finance Minister Andrey Belkavets said on Monday. The Russian side is set to gradually replace export oil duties that used to go to the Belarusian budget. It will result in not only reducing the budget revenues, but also raising imported crude oil prices to the European level.
“All these contracts will be disavowed. When one party considers that it is acceptable only to protect its own interests and others should just do their bidding – it doesn’t have to be this way. Otherwise, we will return to the issue of Belarus’s participation in such a union [Eurasian Economic Union],” the top official said.
According to his estimations, Belarus will lose $10 bn on the Russian tax maneuver; $3 bn being the loss for the budget and $6 bn – for Belarusian state refineries. The Belarusian authorities say that it is unfair because in the wake of the new tax Russia will subsidize its own refineries which will also lose on the changes. Taking into account the world prices, Belarus saves $129 on every ton of crude oil. Annually, such difference turns into additional profit of $2.3 bn. For the past ten years, the Russians have been slowly withdrawing from subsidizing Belarus in the form of cheap gas and oil. However, the new change will be revolutionary. It is the subsidies that the Belarusian economic model is based on; they country failed to do much to prepare for such a change, Belarusian financial analyst Vadzim Iosub believes.
Meanwhile, the Kremlin has offered Belarus compensation in the shape of direct payments to the budget. However, the Belarusian authorities are not very impressed with the idea. According to Iosub, in this case Belarus will become Russia’s direct hanger-on, and the Kremlin will gain another tool of pressure (e.g. withholding payments) if the Belarusian authorities do not behave as expected.
Belarus’ announcement to leave the Eurasian Economic Union seems to be an attempt to blackmail Russia, political scientist Valer Karbalevich says. However, the expert believes that even if the tax maneuver will cost Belarus 3 per cent GDP, it will not leave the EEU.
