UPDATE 1-Belarus gets new Russia proposal on oil supplies - Lukashenko

Belarus said Russia has proposed compensating the country for the cost of tax changes relating to Russian oil supplies in 2019, signalling potential progress in a two-month row between the two countries.

Minsk and Moscow have been at loggerheads since January 1, when they failed to agree on oil delivery terms for 2020 and major Russian oil companies suspended pipeline oil supplies to Belarus. Belarus President Alexander Lukashenko said the compensation could amount to $300 million, after he spoke by telephone with Russian counterpart Vladimir Putin. He also said Moscow was ready to keep oil supply terms for 2020 the same as in 2019.

"It was an unexpected proposal," Lukashenko said when meeting one of Russia's regional officials in Minsk. He did not provide further details. The Kremlin said the presidents of the two countries had discussed cooperation in the energy sector, among other bilateral issues.

Russia and Belarus have not reached any firm agreement on the terms of oil supplies to Belarus, Kremlin spokesman Dmitry Peskov told reporters on a conference call. Moscow had been supplying crude oil and oil products to Minsk with no export fee under a duty-free deal between Russia, Belarus and Kazakhstan. But it amended its tax code in 2019 to halt that arrangement.

The Russian tax changes cost Belarus $330 million in 2019, Belarus said this month. The country's state budget lost $130 million, while Belarusian oil refineries lost $200 million. Safmar Group companies, Russneft and Neftisa, are currently the only suppliers of Russian oil to Belarus, forcing Minsk to look for crude from other countries.

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