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Belarus ditches oil transit tax Russia says oil flow to restart
(about 3 hours later)
Belarus has cancelled a transit tax on oil shipments from Russia, according to the country's prime minister. Oil should start to flow "soon" via the Druzhba pipeline that crosses Belarus, officials from Russia and the EU say.
The move, following meetings between government ministers, marks progress in resolving an argument with Moscow over oil which began earlier this week. Vladimir Chizhov, Russia's ambassador to the EU said oil could start flowing in the next few hours, a view echoed by the EU's energy chief Andris Piebalgs.
Russia closed the pipeline on Monday after it accused Belarus of stealing oil supplies. The news comes after Russia cut off oil supplies to Belarus on Monday, claiming it had been siphoning off oil supplies.
Oil through the Druzhba pipeline - across Belarus - could flow again soon, European customers say. In retaliation, Belarus put a transit tax on oil shipments from Russia, but withdrew it earlier on Wednesday.
"The government, taking into consideration bilateral agreements with the Russian government, has taken the decision to cancel the state duty for the transit of oil along the state pipeline network," said Belarussian Prime Minister Sergei Sidorsky. One of Russia's main demands had been that the tax be cancelled, in a bid to resolve the dispute.
According to Transpetrol, which runs Slovakia's section of the pipeline, supplies will start later on Wednesday. Mr Chizhov said he thought the issue had effectively been resolved and Mr Piebalgs said he thought oil would be flowing normally by Thursday at the latest.
However, while Mr Piebalgs said the EU was keen to keep using Russian oil, he also sought reassurance that oil would not be cut off again.
CriticismCriticism
The move by Russia to cut off supplies via the Druzhba - or Friendship - pipeline has elicited much criticism, most recently from the International Energy Agency's head Claude Mandil.The move by Russia to cut off supplies via the Druzhba - or Friendship - pipeline has elicited much criticism, most recently from the International Energy Agency's head Claude Mandil.
RUSSIAN OIL USERS* Hungary - 83.5% of all oil suppliesSlovakia - 82.2%Finland - 79.1%Poland - 77.2%Czech Republic - 49.3%Belgium - 31.8%Sweden - 29.4%Germany - 26.2%Netherlands - 25.3%Italy - 18.1%Austria - 16.8%France - 11.4%Denmark - 2.1% *Source: Petroleum Economist magazine Q&A: Pipeline shutdown Analysis: Oil rowRUSSIAN OIL USERS* Hungary - 83.5% of all oil suppliesSlovakia - 82.2%Finland - 79.1%Poland - 77.2%Czech Republic - 49.3%Belgium - 31.8%Sweden - 29.4%Germany - 26.2%Netherlands - 25.3%Italy - 18.1%Austria - 16.8%France - 11.4%Denmark - 2.1% *Source: Petroleum Economist magazine Q&A: Pipeline shutdown Analysis: Oil row
He said the move undermined faith in Russia as an oil exporter. "It is more difficult to be confident" Mr Mandil told the Reuters news agency.He said the move undermined faith in Russia as an oil exporter. "It is more difficult to be confident" Mr Mandil told the Reuters news agency.
Mr Mandil added that if stocks in countries affected were to fall under 90 days worth the IEA would "order a coordinated stocks release". Mr Mandil added that if stocks in countries affected were to fall under 90 days worth the IEA would "order a co-ordinated stocks release".
German Chancellor and current European Union president Angela Merkel had denounced the pipeline closure as unacceptable and one that "destroyed trust" in Russia as an energy supplier.German Chancellor and current European Union president Angela Merkel had denounced the pipeline closure as unacceptable and one that "destroyed trust" in Russia as an energy supplier.
TalksTalks
Before Belarus announced it would end the transit tax, talks between Moscow and Belarus had taken place in an attempt to resolve the dispute. Earlier on Wednesday, Moscow and Belarus had been in talks to resolve the dispute.
Following those talks a statement from Belarus President Alexander Lukashenko's office said: "The prime ministers of Belarus and Russia were ordered to work out concrete proposals within two days for resolution of all problem questions."Following those talks a statement from Belarus President Alexander Lukashenko's office said: "The prime ministers of Belarus and Russia were ordered to work out concrete proposals within two days for resolution of all problem questions."
His office added that suggestions made at those talks needed to be submitted for review by the heads of state by Friday, 12 January.
History
The dispute was sparked when Russia forced Minsk to grudgingly accept a doubling in the price of gas supplies.The dispute was sparked when Russia forced Minsk to grudgingly accept a doubling in the price of gas supplies.
In retaliation, Belarus imposed a new tax on Russian oil shipments passing through the country. Russia has refused to pay the duties, saying they are illegal.In retaliation, Belarus imposed a new tax on Russian oil shipments passing through the country. Russia has refused to pay the duties, saying they are illegal.
On Monday the conflict came to a head when Russian state-owned pipeline firm Transneft closed the Druzhba pipe, saying Belarus had been siphoning off oil supplies as payment in kind for the unpaid duties.On Monday the conflict came to a head when Russian state-owned pipeline firm Transneft closed the Druzhba pipe, saying Belarus had been siphoning off oil supplies as payment in kind for the unpaid duties.
The 2,500-mile-long pipeline has the capacity to ship more than 1.2 million barrels a day to eastern and central Europe and typically works at close to full capacity.The 2,500-mile-long pipeline has the capacity to ship more than 1.2 million barrels a day to eastern and central Europe and typically works at close to full capacity.