April 29, 06

NEWS / Russia warns Belarus of market-level natural gas prices - source

ST. PETERSBURG, April 28 (RIA Novosti) - Russia has warned Belarus about its plans to supply natural gas at market prices, a source in a Russian delegation at talks with Belarusian President Alexander Lukashenko said Friday.

"We warned them that we will be setting standard terms of gas supplies to Belarus, which may be adjusted depending on market fluctuations," the source said, adding that a single currency for the two counties would be an easier means of payment.

Belarus will buy 21 billion cubic meters of Russian gas at $46.68 per 1,000 cu m under a contract for 2006 signed in December with energy giant Gazprom. The rate is close to the heavily-subsidized prices Gazprom offers to Russian domestic consumers

Gazprom has consistently sought to raise prices for former Soviet republics to market levels, which led to a highly publicized spat earlier this year that saw supplies to Ukraine suspended when it refused to pay the new rate of $230 per 1,000 cu m up from the previous price of about $50.

Late in March, Gazprom CEO Alexei Miller said: "In 2007, Russia should provide natural gas to Belarus at European prices."