Belarus Continues to Push for Lower Gas Prices from Russia amid COVID-19 Pandemic
On April 9, the National Assembly of Belarus ratified a protocol that gave the go-ahead to the government of Belarus to seek an amendment to the Belarus-Russia Intergovernmental Agreement from 2011, a document that sets the price of natural gas imports to the country. During the period since, Minsk has been seeking to persuade Moscow to offer greater pricing flexibility (aligning prices more with market forces), including to other former-Soviet countries that make up the Eurasian Economic Union (EAEU). This pressure intensified from member states amid the COVID-19 pandemic. The urgency coming out of Belarus on this subject has also been influenced by their perceived vulnerability to supply disruptions after the Nord Stream 2 pipeline comes online, which will allow Russia to circumvent its traditional land routes to Western Europe that not only includes Ukraine, but also Belarus.
Belarussian President Alexander Lukashenko is pushing for a significant drop in price to $40–45 per 1,000 cubic meters, rather than the current $127 paid for the same volume. Belarus currently pays more than Germany for gas, despite being the primary transit point for Russian gas supplies to western Europe (via the Yamal gas pipeline). Effective diversification away from Russian will be difficult for Belarus given the limited alternatives for natural gas available to the country or infrastructure for bringing in non-Russian supplies.
It remains to be seen what impetus the coronavirus crisis will provide for a negotiation of more favorable terms for Belarus, but it seems unlikely that Moscow would agree to any long-term solution that is based on what it might perceive to be a short-term problem. On April 15, a Kremlin spokesperson indicated that deliberations on Belarus’ and the EAEU’s gas pricing will occur at the ”expert level.”