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Alexander Medvedev, second in charge at Russian gas supplier Gazprom, speaks to the media after talks with German Economy Minister Michael Glos on January 6, 2009 in Berlin, Germany. (Sean Gallup/Getty Images)
Moscow started to turn off the natural gas tap to Belarus on Monday following a debt dispute, in a move reminiscent of previous Russian gas cuts that left parts of Europe starved for gas.
In a televised talk between Russian President Dmitry Medvedev, and chief executive of Russia's state-controlled gas-giant Gazprom, Medvedev ordered the company to start cutting off gas supplies.
Gazprom’s chief executive, Alexei Miller, said the company would cut gas supplies to Belarus by 85 percent in the coming period, starting with 15 percent immediately. The move came after days of talks between the two gas companies did not yield results.
According to Gazprom, Belarus's gas debt is an estimated $192 million.
Miller told Medvedev that Beltransgaz had suggested repaying the debt by bartering machinery and equipment, but that the Russian leader called such a proposal unacceptable.
“The debt must be paid in accordance with the contract and the contract stipulates complete payment in foreign currency. … By law, Gazprom cannot take pies, butter, cheese, or pancakes or any other form of payment [for the debt]. Our Belarusian partners must understand this,” Medvedev said.
The issue creates a political reason for Moscow to make Belarus join a Kremlin-headed customs union, according to Vladimir Omelchenko, a gas expert of Ukrainian think tank Razumkov Center.
Last May, Russia and Belarus failed to sign an agreement on the customs union due to a disagreement by Belarus over duties on oil and petroleum.
Russia supplies 20 percent of its natural gas to Europe using Belarus's transportation system, the rest is transported through Ukraine.
Both sides say that gas supplies to Europe will not be affected. A similar incident last January between Ukraine and Russia left parts of Europe without Russian gas for two weeks during the winter.
Ukraine has now stated that in case of an interruption of gas supplies through Belarus, it could supply the extra gas to Europe.
