"They critically depend on the gas price". Why Moscow makes concessions to Minsk

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to Gazeta.Ru, why Russia cannot sell gas to Belarus at more favorable spot prices.

By the end of this year Minsk intends to sign a new long-term agreement with Gazprom for gas supplies. At the same time, the price of natural gas is expected to once again become the lowest among the European partners of the Russian energy monopoly - $ 128.5 per thousand cubic meters.

According to Sergey Kondratiev, a senior expert at the Institute for Energy and Finance, Minsk earns billions of euros annually from the difference in fuel costs. In turn, Gazprom risks losing at least $ 1.5-2 billion from a cheap contract next year.

“Another Belarussian state-owned enterprise, Grodno Azot, is acutely dependent on cheap Russian gas, which annually receives more than 1 billion cubic meters of gas. It produces and exports various mineral nitrogen fertilizers. Here we are already talking about hundreds of millions of euros. The total revenue is about 1 billion euros annually,” the analyst explained.

At the same time, Minsk's keen desire to create a single energy space with Russia in the foreseeable future may lead to even lower prices for natural hydrocarbons. The fact is that Belarus wants to receive fuel from Moscow at the same price as the Smolensk Region, the cost of fuel for which is only $ 60 per thousand cubic meters. In this situation, according to Kondratiev, Gazprom will lose another $ 1.2 billion annually, while Minsk, on the contrary, will be able to earn about $ 2.2 billion.

Gazprom will do its utmost to impede unified pricing following the example of the Smolensk Region. Otherwise, it will mean big losses," Kondratiev summed up.