Slump in oil processing: Belarus economy’s flagship turning into loss-maker


It is vital that Belarus bust out of a slump in oil processing, president Alyaksandr Lukashenka said on Thursday.

According to the experts, in 2016 Belarusian oil refining plants lost $2.8 bn due to the reduction of oil deliveries from Russia and a fall in oil prices on the world market.

“There is no need to stress once again the the urgency of the issue. I have once said that that the degree of its importance is comparable with that of the independence of our state. We should do our utmost to ensure the energy independence and security of Belarus. We should work out a plan of action to help the oil refiners overcome the difficulties they are facing,” state-run news agency BelTA quotes Lukashenka as saying.

Oil processing, a strategic industry for Belarus, accounts for more than 13% of the country’s industrial output and about 17% of Belarus’ export, he stressed. However, last year its added value in the GDP made up only 0.5%. The contribution of two oil refineries is comparable with that of Beltelecom [Belarus’ National Telecommunications Operator], Alyaksandr Lukashenka admitted. Moreover, trade deficit is looming by the end of 2017.

“Such situation is deeply worrying. Oil refining, the flagship of our economy, is now turning into a loss-maker,” he stated. The Belarusian leader also recognised that the modernization of the oil refineries had not yielded a proper outcome despite funds invested in it.

Belarusian enterprises were not ready to work effectively in the face of declining oil prices, the head of state regrettably said. “Now Naftan hardly makes both ends meet and is constantly seeking the state support,” he said.

Photo – president.gov.by

Belarusian economist Tatsyana Manyonak says that Belarus is highly dependent on external conditions as a country that imports crude oil and exports oil products.

“The situation in this field is determined by several factors: the decline in world oil prices, the reduction of Russian oil supplies to Belarus and Moscow’s introducing a tax maneuver. Last year, Belarus failed to receive $1.6 bn due to negative pricing environment and $1.2 bn USD due to short-deliveries of Russian oil.Moreover, one should keep in mind that Naftan is subsidizing the Belarusian petrochemical industry by supplying raw materials to enterprises at a reduced price, which is also a serious loss previously estimated at 12 mln euros per month. In addition, the country’s leadership did not allow Belneftekhim to raise the prices of petroleum products in Belarus, which, in turn, deprived the concern of the opportunity to increase the profitability on the domestic market,” she told Belsat TV.

belsat.eu

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