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Last Updated: Saturday, 13 January 2007, 07:11 GMT
Moscow and Minsk resolve oil row
Worker checking Druzhba oil pipeline

Russia has agreed to slash duty it will charge Belarus for crude oil, ending a damaging row between the two states.

Belarus will now pay $53 a tonne for oil it imports, instead of the $180 Russia had previously demanded, Russian Prime Minister Mikhail Fradkov said.

It will also share with Russia profits from the refined oil products it exports to other countries.

Disputes between the two states led to Russia halting the flow of oil through Belarus to elsewhere in Europe.

The agreement came after about 10 hours of negotiations between Mr Fradkov and his Belarussian counterpart, Sergei Sidorsky.

All is well that ends well
Mikhail Fradkov
Russian PM

The presidents of the two countries, Vladimir Putin and Alexander Lukashenko, also held talks.

Officials from the two countries reached "a balanced solution, corresponding to the interests of both countries", Mr Fradkov said in televised comments, adding that the talks had been "hard".

"All is well that ends well," he added.

Supplies sent through the Druzhba pipeline were halted for three days after Minsk increased the transit tax for oil which passed through the country.

Tense talks

The dispute between the two former Soviet countries came after Moscow forced Belarus to accept a major increase in the cost of gas supplies to the country in late December.

Russia later imposed a hefty duty on oil exports to Belarus, claiming its neighbour was costing it up to $4bn in lost revenues each year.

In retaliation, Belarus slapped a $45-per-tonne transit tax on oil shipments from Russia, but withdrew it earlier on Wednesday after tense top-level government talks between both sides.

At its height, the dispute hit Russian oil supplies to Germany, Poland, Ukraine and other European countries via the Druzhba pipeline.

The closure of the pipe was condemned by the International Energy Agency as a "grave" incident.

Agency boss Claude Mandil said the supply cut-off undermined faith in Russia as an oil exporter and was "something that should never have happened".

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