Belarus introduces tax on oil transit and transportation - Reuters

MINSK (Reuters) - Belarus introduced a tax on Friday on oil transportation and transit across its territory, setting it at 50% of profits, a statement from the president’s office said.

The new tax, signed into law by Belarusian President Alexander Lukashenko on Friday, comes during an energy row between Moscow and Minsk over the contract terms on which Russian oil is supplied to Belarus.

Russia suspended oil supplies to Belarus on Jan. 1, though two Russian companies have subsequently restored supplies.

The two countries, which have had several oil and gas disputes over the past decade, are trying to negotiate a new oil supply deal.

It was not immediately clear what impact the new tax would have on Russian oil transit to Europe via Belarus.

Lukashenko said on Thursday that Moscow and Minsk had thus far failed to reach a deal as Russia had asked for an oil price higher than the global average.

Arguments between Moscow and Minsk have in the past led to the disruption of supplies to Europe, which gets 10% of its oil from Russia via Belarus’ Druzhba pipeline transit link. Transit along the pipeline has continued uninterrupted so far this year.

Russian oil pipeline monopoly Transneft (TRNF_p.MM), which operates the Druzhba pipeline, was not immediately available for comment. Railways operator Russian Railways, which transports oil to Belarus, declined to comment.

The new tax is motivated primarily by environmental concerns, the statement by Lukashenko’s office said.

“In order to create a source of funds for the mitigation of the environmental consequences of a potential accident on the main oil pipeline... a tax has been imposed on organizations transporting oil and petroleum products across Belarus at a rate of 50% of profits,” the statement said.

“The environmental tax will also apply to the transit of oil and petroleum products across Belarus along key pipelines,” it added.

Reporting by Andrei Makhovsky; Writing by Polina Ivanova; Editing by Andrew Osborn and Louise Heavens

Our Standards:The Thomson Reuters Trust Principles.

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