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Russia, Belarus sign oil transit agreement

The agreement resolves an oil transit row that had disrupted supplies through the main export pipeline to Europe.

india Updated: Jan 13, 2007 09:05 IST

Russia and Belarus have signed a formal agreement resolving an oil transit row that had disrupted supplies through the main export pipeline to Europe, Russian media said.

Officials from the two countries reached "a balanced solution, corresponding to the interests of both countries," Russian Prime Minister Mikhail Fradkov was quoted on Friday, by ITAR-TASS as saying.

The agreement came after the two countries' presidents talked on Friday on telephone, unblocking the final obstacles in a dispute that had disrupted oil supplies to the European Union earlier this week and damaged Russia's reputation as a reliable energy supplier.

The agreement covers several aspects of the countries' complex oil trading arrangements, which Moscow had said earlier were being unfairly exploited by Belarus.

Moscow had accused Minsk of making disproportionate profits by processing cheap Russian oil and selling it on European markets.

The dispute prompted the shut-down of the Druzhba (friendship) pipeline, Russia's main oil export pipeline to Europe, on Monday.

On Friday, Fradkov said that Minsk would pay a tax of 53 dollars per tonne of oil that it imports from Russia and would also pay Moscow a tariff on exports of oil products made in Belarussian refineries using Russian oil.

"We will have 53 dollars for each tonne supplied to Belarus," he was quoted by RIA Novosti as saying.

Monday's shut-down came when Belarus attempted to impose a 45-dollar-per-tonne tax on oil crossing its territory from Russia to Europe, a tax Moscow said was illegal.