* Despite tentative deal reached at end-August* Price said to be set in rubles, not dollars, sources say* 2017 price to be equivalent to $92.50/1,000 cu m
There is still no final agreement on changes to the price Belarus pays for Russian gas, energy minister Alexander Novak said Thursday, despite reports of a preliminary deal at the end of August.
Moscow and Minsk reportedly reached a preliminary deal that would have resolved the standoff between the two countries that saw Russian crude supplies to Belarus cut in Q3.
"On the gas price for Belarus, there is no decision, the talks continue," Novak was quoted as saying by the Prime news agency.Asked whether Russia would limit crude supplies to Belarus in the fourth quarter too, Novak said: "There are no decisions on this matter, we are still in the third quarter."
The dispute, which began in May, had led to fears that Russia was using energy to put pressure on its western neighbor having already cut off Belarus' gas supply before in 2004 and 2010 because of a pricing spat.
Russia's current price for Belarus stands at $132/1,000 cu m, but Belarus believed that $73/1,000 cu m would be a fair price under current market conditions.
According to Russian daily Kommersant, a deal was struck during talks between the two on August 25, though it had yet to be signed off at the highest level.
Under the agreement, the price would based on a contract formula in rubles rather than dollars and be based on the average gas price in Russia plus a coefficient, sources close to the matter told the paper.
For the remainder of 2016, Belarus would pay Rb6,300/1,000 cu m ($97.20/1,000 cu m at current exchange rates) while the price in 2017 would drop to Rb6,000/1,000 cu m ($92.50/1,000 cu m)
After 2017, the price of gas Belarus pays would continue to converge with the Russian domestic gas price until it reaches parity by 2025 when a single power market for the two countries is set to be established.
According to Kommersant, the one stumbling block to a final deal was when the new agreement would enter into force -- Belarus wants it to be retrospectively applied from July 1, 2016, while Russia prefers August 1.
Belarus is one of Russia's biggest gas customers, buying some 19 Bcm in 2015.
