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Today's paper. Last Updated: 06/01/2012

CIS Oil: Crisis Industry

xCommonwealth of Independent States oil industry leaders have called for urgent steps to end the financial crisis threatening their fuel supplies, the Fuel and Energy Ministry said Friday.


A meeting of deputy ministers and other senior officials in Moscow this week discussed establishing new mechanisms, possibly a clearing system, for settling accounts between suppliers and consumers, a ministry statement said.


The officials also discussed removing legal and other obstacles to trade in oil- and gas-industry output and equipment between CIS states.


The ministry gave no further details of the proposals, which have been discussed several times before to no avail.


Russian fuel producers are owed about 30 trillion rubles ($15 billion) by consumers -- 60 percent of total nonpayments in the Russian economy. The debt for fuel supplies to other former Soviet republics in 1993 stands at about 2 trillion rubles, with Ukraine's share 1.3 trillion rubles.


Russian officials say the debt, along with a punitive tax regime, has brought the industry to its knees, forcing many producers to shut in output and use investment funds to meet day-to-day operating expenses.




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