Russia, Belarus may settle “solvent problem”

Russia, Belarus may settle “solvent problem”

PanARMENIAN.Net - Russia and Belarus may settle the “solvent problem,” which has reportedly inflicted a $1.5 billion loss on the Russian budget as Minsk exported duty-free gasoline and other oil products refined from Russian crude, but labeled them “solvents.”

According to RIA Novosti, Russian Prime Minister Dmitry Medvedev will take part in a meeting of the Council of Ministers of the Russia-Belarus Union State on Wednesday, Dec 12, and hold talks with his Belarusian counterpart Mikhail Myasnikovich “focusing on a wide range of bilateral interaction on integration, the implementation of joint research and technical programs, and further cooperation in various fields of economy,” the Kremlin press office said.

One contentious issue the sides are likely to discuss is the “solvent problem.”

Russian Energy Minister Alexander Novak has said that Russia would sign an indicative balance of oil and oil products supplies to Belarus for 2013 while Deputy Prime Minister Arkady Dvorkovich said that the volumes of crude and oil products supplied to Belarus will be discussed during talks to resolve this issue.

Russian officials have repeatedly expressed concern about Belarus exporting oil products to Europe under the guise of solvents and thinners to evade additional tax payments to the Russian budget.

Belarus stopped these exports in August, but during talks on crude supplies to the ex-Soviet republic for the fourth quarter of 2012 and 2013 Russia suggested that Belarus should compensate Russia for the resulting $1.5 billion losses, a source in the Belarusian government told Prime news agency.

Belarus, as a member of the Moscow-led customs union, does not pay customs duties on oil supplies from Russia. In return, the ex-Soviet republic is expected to pay this duty to Russian, if it refines the imported Russian crude and exports it as fuel and petroleum products.

In an apparent move to boost its foreign currency earnings, Belarus has started exporting petroleum products described in cross-customs documents as “complex organic solvents.” Under the customs union regulations, solvents can be exported to world markets duty-free.

According to Belarus’ Statistical Agency Belstat, Belarus exported 244,000 tons of “solvents” in 2010, with this figure rising to 2.1 million tons in 2011 and to 2.9 million tons in the first half of 2012. Latvia was the main buyer – purchasing 1.5 million tons.

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