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Kremlin Pays Gazprom to Cut Belarusian Gas Prices

Sergei Porter / Vedomosti

The Kremlin has agreed to pay state-owned energy giant Gazprom $1.3 billion to supply Belarus with cut-price gas, the Kommersant newspaper reported Tuesday.

Minsk will receive lower gas prices in return for canceling a planned price hike for Russian companies transporting oil through the country, the newspaper wrote.

Unnamed sources also claimed that Belarus had pledged to enter into a common energy market as part of the deal, which will see their gas bill slashed by approximately 30 percent.

The payments will be spread across the next two years, with the Gazprom set to receive $402 million before the end of 2016.

Long-running price negotiations on gas have put an increased strain on Belarus and Russia's traditionally close ties in recent months. When Moscow announced in September that it would reduce Belarus' oil supply over allegedly unpaid bills, President Lukashenko claimed that the Kremlin wished to “put pressure” on Minsk to agree to higher gas tariffs.

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