Russia has cut natural gas supplies to neighboring Belarus over a payment dispute. However, Belarus says it will continue to provide uninterrupted transit of Russian gas to Europe despite the cut, and promised to pay its debt within two weeks.

On Monday, Russia's energy giant, Gazprom, said it was cutting gas supplies by 15 percent to Belarus, following an order from Russian President Dmitry Medvedev.

The company also warned that it will increase the cuts to as much as 85 percent in the coming days, if Belarus fails to pay some 200 million U.S. dollars in debt that it owes to Gazprom.

Alexei Miller, Gazprom's Chief Executive, said, "From ten o'clock in the morning Moscow time, June 21st, the cuts began at 15 percent of previous daily volumes of Russian gas supplies to Belarus. It will gradually reach 85 percent, proportionally to the debt's volume."

Belarus' economy has been struggling to cope with rising Russian natural gas prices and excise hikes on Russian oil imports.

A Belarussian delegation has held talks over the gas debt issue in Moscow with Russian officials.

Belarus on Monday promised to pay its debt to Gazprom within two weeks, and offered to send machines, equipment and other commodities.

Bladimir Semashko, Belarus' First Deputy Premier, said, "We will have to borrow in the West to pay the debt. We will repay, maybe not today, but we will repay, I think within two weeks, we will find a possibility. We will borrow and repay."

Russian gas transits via Belarus, amount to one-tenth of Europe's needs.

Gazprom has said that European customers won't be affected as the company can channel gas supplies normally going via Belarus to another transit pipeline crossing Ukraine.

Go to Forum >>0 Comments