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On the surface, Russia is a staunch supporter of
Belarus
and
its controversial leader, President Alexander Lukashenko, who many in the West call
Europe's last dictator.
Mr. Lukashenko has been in power for 12 years, and by official count,
won an overwhelming victory for an unprecedented third term in last
month's election.
Russia quickly congratulated the long-time ruler on his victory, which
most of the world criticized as being marred by fraud.
The United States and European Union plan to impose new sanctions
against the Lukashenko government in response to the elections.
Most analysts say Russia supports Belarus as a
kind of buffer zone on its western border, and because the Kremlin is
angered by what it calls Western meddling
in what it considers its backyard - the former Soviet
republics.
However, the Russian backing is not unconditional. And the move to
increase gas prices is primarily seen as a means for Gazprom to gain
control of Belarus's gas pipeline transit system, run by the state company
Beltransgaz.
Roman Yelagin is an oil-and-gas analyst with the Renaissance Capital
firm in Moscow. He says the Russian gas giant has made similar moves in
other neighboring countries, such as Armenia. "Such deals are closely
linked with Gazprom's ambitious policy to take control over the gas
pipeline assets in countries, in exchange for the lower, or stable gas
prices," he said.
Beltransgaz carries a large proportion of Russian gas to key markets in
Western Europe, and Gazprom has a stated goal of consolidating its hold on
the gas market.
It also needs to increase capital, in order to build new pipelines and
improve existing infrastructure.
Gazprom has already raised rates for gas to other ex-Soviet republics,
including Georgia, Moldova and, most notably, Ukraine.
A demand that Kiev accept a four-fold price increase in January sparked
a crisis, when Gazprom cut off supplies on New Year's Day, a move that also
lowered the flow of gas to Western Europe.
A deal was quickly reached for a lower price increase, amid harsh
international criticism that the Kremlin was using Gazprom as a political
tool over nations that have turned away from Russia politically. Russia
denied the price increases were politically motivated.
Belarus currently pays $47 per 1,000 cubic meters of gas, far below the
European price of $230.
Gazprom Deputy Chairman Alexander Riyazanov says there is nothing
political in the decision to raise prices. Riyazanov says Belarus is the
only one of the former Soviet nations to pay a low price, and that talks
will begin soon to decide on a new price to take effect next January.
Russia has, in fact, tried to raise rates Belarus pays before, and, on
at least two occasions, Gazprom has even cut off supplies.
This happened most recently in January 2004, when President Lukashenko
finally promised to sell Beltransgaz.
However, no deal has been reached, partly because Russia values the
company at $600,000, while Belarus insists it is worth several billion
dollars. Roman Yelagin, the oil and gas analyst, says this is a process of
bargaining. "It is also part of the discussion between Gazprom and the
Belarussian government. It is aiming to (push the) Belarussian government
to finalize their final position in the discussion, in the negotiation
process," he says.
Economists say that a steep gas price increase would threaten Belarus's
command Soviet-style economy, which in turn could threaten Mr.
Lukashenko's grip on power.
Few believe the Kremlin wants to see Mr. Lukashenko fall.
Personal relations between Mr. Lukashenko and Russian President
Vladimir Putin have often been strained, even though the two leaders have
long discussed a possible union of the two countries.
But a lot now depends on whether the two can agree on a satisfactory
outcome to the gas issue. | 
