Belarus and Russia hit gas impasse

But it risks a new wave of Western concern over its reliability as the key energy supplier to Europe, just one year after a similar dispute with Ukraine caused brief disruptions to Russian gas deliveries to several European countries.

Vladimir Semashko, the Belarusian first deputy prime minister, shrugged off the threat and hinted that Belarus could halt supplies of Gazprom gas that is pumped through Belarus to nations including Germany, Poland and Lithuania.

Sergei Kupriyanov, the Gazprom spokesman, said the company, which initially said Belarus must pay $200 per 1,000 cubic metres of gas next year but is now asking for $105, is not prepared to go lower.

Political motivation

In addition to raising the price, Russia wants Belarus to cede Gazprom a 50 per cent stake in its gas distribution system, Beltransgaz.

The politically charged dispute reflects seriously strained relations between Belarus and Russia, which have the closest ties of any two ex-Soviet republics and signed a treaty in the mid 1990s to create a close union.

Russia has supported Alexander Lukashenko, the president of Belarus, in the face of severe Western criticism, but relations have been tense under Vladimir Putin, the Russian president, who angered Lukashenko a few years ago by suggesting an integration scenario under which Belarus would become little more than a Russian province.

Under Gazprom’s offer of a price of $105 in 2007, Belarus would pay $75 per 1,000 cubic metres in cash and $30 in shares of the country’s gas distribution system, Beltransgaz.

The price would increase annually at the same rate as prices for Russian industrial consumers, reaching a market-style European price in 2010.