Global Economics

EU Calls for End to Belarus Gas Dispute


Fearing a cut in the bloc's gas supplies as early as the first week of 2007, the European Commission seeks a price settlement between Belarus and Russia

The European Commission has called on Russia and Belarus to solve their gas pricing dispute fearing that the bloc energy supplies could be affected as early as next week.

"I call on the two parties to reach as soon as possible a satisfactory agreement that does not put in question gas transits to the EU," said energy commissioner Andris Piebalgs in a statement on Thursday (28 December).

"The commission is following the situation very closely since it may affect gas supplies to the European Union," his statement continues.

The commissioner has also called an emergency meeting of the gas coordination group, which oversees security of supplies, for Thursday of next week.

Russia, the EU's biggest gas supplier, has been locked in a price dispute with Belarus since it demanded from Minsk that it pay almost double what it is currently paying for gas, threatening to cut supplies from 1 January if the prices hike is not agreed.

Belarus, which is a transit country for gas coming to Europe, has indicated that supplies could be disrupted if its domestic needs are not met.

Russia provides around a quarter of Europe's total gas needs, with around 80 percent of that being delivered through Ukraine and the rest through Belarus meaning the resulting disruption to the EU if the supplies coming through Belarus were cut off would likely be negligible.

However, the situation highlights the precariousness of the EU's energy supplies and has already made Germany, Russian Gazprom's biggest European customer, nervous.

German economy minister Michael Glos while playing down fears of a threat to supply security in view of the country's storage capacity also urged Moscow and Minsk to come to an agreement.

"I call on the disputing parties to reach a workable agreement as soon as possible ... and so provide proof of their reliability as delivery and transit countries," said the minister.

The EU found itself in almost exactly the same position at the beginning of 2006 when a pricing dispute between Ukraine and Russia led to supplies being disrupted in several member states, including Germany, France and Italy.

The disruptions - highlighting the extent of the EU's reliance on unpredictable Russia - catapulted energy issues to the highest level on the EU's political agenda, where they have remained ever since.

Prompted by the Ukraine dispute, 2006 saw a series of deals with energy-rich countries such as Azerbaijan and Kazakhstan and a new dialogue on how to handle Russia which is crucial for the bloc's supplies but which does not adhere to the EU's standards in areas such as human rights.

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