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Last Updated: Wednesday, 10 January 2007, 10:55 GMT
Russia 'in new threat to Belarus'
Worker checking Druzhba oil pipeline
Russia's decision to shut the Druzhba pipeline may hurt Europe
Russia has threatened to impose duties on all Belarusian imports, a report in local newspaper Vedomosti has claimed.

The move marks an escalation in a trade clash between the two countries, sparked by a dispute over energy costs.

Belarusian officials arrived in Russia on Tuesday for talks aimed at resolving the row, which has led to the shutdown of a key oil supply pipeline to Europe.

However, Moscow said that negotiations cannot begin until Belarus cancels new shipping duties on Russian oil.

Standing firm

As the row between the two countries deepened, business daily Vedomosti quoted an unnamed government official as saying Russia may levy import duties on Belarusian goods as soon as February.

RUSSIAN OIL USERS*
Hungary - 83.5% of all oil supplies
Slovakia - 82.2%
Finland - 79.1%
Poland - 77.2%
Czech Republic - 49.3%
Belgium - 31.8%
Sweden - 29.4%
Germany - 26.2%
Netherlands - 25.3%
Italy - 18.1%
Austria - 16.8%
France - 11.4%
Denmark - 2.1%
*Source: Petroleum Economist magazine

The Russian trade ministry refused to confirm or deny the report, saying only that "such measures are theoretically possible".

Russian Energy and Industry Minister Viktor Khristenko had hinted that Moscow may be considering retaliatory action on Tuesday.

"The trouble which we have seen concerning the transit of oil could be the reason to more thoroughly analyse the preferential regime on other commodities," he said.

Russian president Vladimir Putin also appears to be standing firm in the hope of forcing a swift climbdown from Belarusian leader Alexander Lukashenko when his country runs out of oil stocks in a matter of days, analysts say.

On Tuesday, Mr Putin ordered his government to work out a set of measures aimed at Belarus that would protect the Russian national economy.

'Unreliable'

A day earlier, Russia's oil pipeline monopoly Transneft said it had halted exports through Belarus - effectively halting shipments to Poland, Germany and beyond.

Russia's decision to shut down the Druzhba pipeline, which transports oil across Belarus and on to Europe - has prompted criticism from the European Union (EU).

It has also sparked concerns about the reliability of Russia as an energy supplier.

Despite President Putin's assurances that he would protect the needs of Western consumers, EU leaders have been unable to say when Russian oil would start flowing their way again.

German Chancellor Angela Merkel, whose country holds the rotating EU presidency, said that the halt in supplies was "unacceptable" and made it difficult to build a relationship based on trust.

Russian newspapers have also echoed her concerns - on its front page, Gazeta voiced fears that Russia is increasingly being seen as unreliable.

Row deepens

The dispute was sparked when Russia forced Minsk to grudgingly accept a doubling in the price of gas supplies.

In retaliation, Belarus imposed a new tax on Russian oil shipments passing through the country. Russia has refused to pay the duties saying they are illegal.

On Monday the conflict came to a head when Transneft closed the Druzhba pipeline, saying Belarus had been siphoning off oil supplies as payment in kind for the unpaid duties.

The 2,500-mile-long pipeline has the capacity to ship more than 1.2 million barrels a day to eastern and central Europe and typically works at close to full capacity.


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The worsening relationship between Russia and Belarus



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