Azernews.Az

MINSK – Belarus on Tuesday raised retail gasoline prices by 30 percent on average as the authorities made a fresh bid to keep a lid on an economic crisis while seeking an IMF bailout, Reuters reported.

The hike by state fuel firm Belneftekhim, which raises the cost of a litre of gasoline at the pump to about $1, is the third in two months and means prices have nearly doubled since March, eating away at ordinary Belarussians' dwindling incomes.

The move follows a 36 percent devaluation of the country's rouble, a price freeze on some staple foods and the introduction of fuel rationing.

The step was taken "to protect the domestic market from unsanctioned exports of oil products and to decrease the disparity in car fuel prices between Belarus and neighbouring countries," Belneftekhim said in a statement.

Earlier this month the government of President Alexander Lukashenko imposed a limit of 25 litres of gasoline per purchase on motorists.

The ex-Soviet republic of 9.5 million people, which still runs a Soviet-style economy with key sectors in state hands, has been fighting a deepening currency crisis for months.

It lost more than a quarter of its foreign currency reserves before devaluing its rouble in May by 36 percent against the dollar. On June 1, reserves stood at $3.6 billion, down from $5.0 billion on Jan. 1.

Consumer prices have soared and officials say full-year inflation could reach 39 percent.

Since March, Ordinary Belarussians have been hoarding food staples such as sugar and durable goods ranging from television sets to computers since March.

Shortly after the rouble devaluation the government froze prices of key foodstuffs, but analysts say the measure may lead to shortages and prompt rationing, further denting confidence in Lukashenko's government.

Last week, Belarus secured a $3 billion loan from a Russian-led regional bailout fund, to be disbursed over the next three years. As a key condition, Minsk must sell off state assets worth $7.5 billion over that time.

Minsk is already in talks to sell its 50 percent stake in the Belarussian gas pipeline network to Russia's Gazprom, which owns the other 50 percent, for $2.5 billion.

However, each side said this week that there were serious disagreements over the terms of the deal.

Belarussian Deputy Prime Minister Vladimir Semashko said on Tuesday that Minsk wanted Gazprom to cut the price of gas supplied to Belarus to the level used for domestic supplies in Russia as a condition of the sale, state news agency BelTA reported.

On Monday, Gazprom Chief Executive Alexei Miller said the sale and gas price were unrelated issues.

Among other Belarussian assets that could be interesting to Russian investors is potash miner Belaruskali. Minsk has said it could sell a 25 percent stake in the firm and analysts estimate it could fetch $7-8 billion.

The government is also in talks with the International Monetary Fund for a loan of up to $8 billion, though analysts say negotiations will be far from easy.

"(The Russian loan) is somewhat supportive but I don't think it plugs the hole in the balance of payments," said Citi analyst Luis Costa. "It's still a pretty difficult situation."

On Tuesday, Belarus' 2018 Eurobond was down 0.2 points, the first price drop since June 1 when Minsk said it was seeking IMF assistance.

Belarus is due to pay a $45 million coupon on the 2018 bond on July 26 and a $44 million coupon on the 2015 Eurobond in August.