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Russia has kept Belarus in its political orbit through energy
subsidies and loans but Moscow plans to phase these out to
lessen the burden on its economy which has been squeezed by
Western sanctions since its 2014 annexation of Crimea.
"I want to remind you once more that, first of all, we have
never promised anyone to compensate for other countries' lost
profit, even to the ones who are very close to us," Medvedev
told a government meeting.
Russia, Belarus and Kazakhstan have a duty-free arrangement
under which Moscow has been sending crude oil and oil products
to Minsk with no export fee. Belarus then re-exports some of
those goods, pocketing the associated charges.
However, on January 1 Russia halted the subsidies as it amended
its tax code.
Medvedev said Russia is continuing talks with Belarus in
relation to its oil tax reforms. Belarus estimates it will lose
$300-$400 million a year due to the oil tax changes. Russia says
the subsidies cost it billions of dollars.
Moscow suspended negotiations in December, saying compensation
depends on the degree of integration between Russia and Belarus.
Last week, Belarus President Alexander Lukashenko threatened to
route the country's trade in oil and oil products exclusively
through the Baltic states, and said Minsk's relations with
Russia could break down over the subsidy row.
(Reporting by Polina Nikolskaya; writing by Vladimir Soldatkin;
editing by Jason Neely)
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