OREANDA-NEWS. April 14, 2011. The industrial output in Belarus should rise by 54-60% during this five-year period, First Deputy Prime Minister of Belarus Vladimir Semashko told.

He noted that in Q1 2011, Belarusian companies demonstrated a rather high industrial growth. “Each company, be it small, medium-sized or big, has a business plan for 2011 with the prospects until 2015 included,” Vladimir Semashko reminded. In his words, the performance of some companies in the first months of 2011 exceeded expectations of the Government. For example, in Q1 2011, MAZ increased output by 75.6%.

The overall economic objective is to maintain the momentum and even to increase it over this five-year period. “We should strive for a 54-60% increase in the industrial output; to this end, the production should expand by 9-10.5% every year,” Vladimir Semashko said.

The First Vice-Premier noted that in January-February 2011, the industrial growth stood at 11.1%. “We expect to maintain momentum and even exceed the projections for Q1,” he added.

However, Vladimir Semashko expressed concern over a significant share of loss-making companies. For example, in January, such companies accounted for 10-25% of all enterprises. However, the number of such companies is decreasing. For example, last year they accounted for 29% (the Industry Ministry), while in January 2011 the figure dropped to 20%.

According to Vladimir Semashko, there are plans to boost the investment growth into the industrial production of Belarus. The relative investment program has been designed and coordinated.

Investment in the industrial sector of the Republic of Belarus will increase four times in 2011-2015 as against the previous five years.

“If in 2006-2010 the investment in the industrial complex from different resources totaled Br27 trillion, then in 2011-2015 this figure should go up to Br96-98 trillion and even reach Br100 trillion,” Vladimir Semashko stressed.

He emphasized that this is quite a serious task and there is no time for a slow start. “Our ministries, departments and companies have been instructed with the implementation of the programs on construction of new manufactures, installation of new equipment and implementation of advanced technologies. These tasks should be accomplished,” the official said.

The Belarusian official emphasized that the major goal is to reach zero balance of foreign trade and further secure surplus.

The organizations of the Industry Ministry of Belarus are expected to post a foreign trade surplus of USD 2.8 billion in 2011, First Vice Premier told.

“It is an ambitious goal keeping in mind the last year surplus of USD 1.6 billion. This is 60-65% up,” Vladimir Semashko stressed. According to the preliminary data, in Q1 2011 the Industry Ministry of Belarus reached USD 680 million in foreign trade surplus. This is close to what we are to reach, Vladimir Semashko stressed.

Belarusian oil refineries are now operating at 100% capacity, First Vice Premier told media.

According to the official, there was a slight interruption in the operation of Belarusian oil refineries in January 2011. The interruption was caused because Belarusian and Russian companies as well as the Belarusian petrochemical concern Belneftekhim had to discuss the pricing formula. This is why the oil refineries did not operate at full capacity in January, said Vladimir Semashko.

At present the situation is reversed. Belneftekhim is busy thinking how to process the oil that Belarus is supposed to buy from Russia (21.68 million tonnes). Belarus will get another 4 million tonnes from Venezuela, reminded First Vice Premier of Belarus Vladimir Semashko.

He added that the Government was not totally satisfied with how fast the matter was being decided upon. The official believes that the process was delayed. “But I think the goal set by the President will be accomplished. This is why all the refineries are operating at 100% of their capacity and more than that now,” said Vladimir Semashko.

Higher prices for oil products on the Belarusian market are caused by growing global prices for oil, First Vice Premier told.

The global oil prices are rising due to various factors including events in Africa and the world as a whole, Vladimir Semashko said.

In his words, in October 2010 the average monthly price for oil stood at \\$84.6 per barrel while in March 2011 the price reached USD 114.7 per barrel (38.5% up). Meanwhile Belarusian retail prices for petrol rose by 15%, prices for diesel fuel 22%.

Vladimir Semashko also explained that Belarus imports most of the oil it needs. In 2011 Russia will supply 21.68 million tonnes of oil while other sources will provide 4 million tonnes. Belarus’ domestic oil extraction provides around 1.7 million tonnes of oil. Still the Belarusian Government works hard to tame retail and wholesale prices for oil products on the Belarusian market.

The price for Russian gas for Belarus will make USD 244.7 per 1,000 cubic meters in Q2 2011, First Vice Premier of Belarus told media.

According to the First Vice Premier, it is the lowest price among Belarus’ neighbors. For instance, in Ukraine the gas price stands at USD 290, in Germany it exceeds USD 400.

Belarus and Russia are in negotiations on a new contract for gas deliveries in 2012-2014, Vladimir Semashko said.

The official reminded that the Belarusian-Russian agreement on gas deliveries was signed on 31 December 2006 and expires on 31 December 2011. “I visit Gazprom every month and we discuss various things,” said Vladimir Semashko. “Therefore in order to avoid situations like the one we had in 2006, we are negotiating a new contract for 2012-2014. We aim for this timeframe because starting 2015 we plan to start using the equal income principle”.

The official explained that the equal income principle expects Russia to get the same profit norms regardless of the country that buys energy resources. But it does not mean that the price will be the same across the board. According to Vladimir Semashko, taking into account various factors gas price for Belarus will be 1.5-2 times lower than gas price for other countries.

First Vice Premier added that there were no problems with fulfilling the gas budget (21.5 billion cubic meters) in 2011. The gas budget is being fulfilled properly.

The loan agreement to finance the construction of the Belarusian nuclear power plant will be signed in June, Vladimir Semashko told reporters.

“In January 2011 Rosatom Chief Sergei Kiriyenko and I signed a plan of action under which we are to sign the loan agreement in June. We are working on it. The finance ministers of Belarus and Russia met in Moscow on 22 March to discuss all the points of the agreement and agreed upon all the terms of the loan. We expect the Finance Ministry of Russia to submit a draft loan agreement in late April,” Vladimir Semashko said.

He reminded that Russia and Belarus signed two agreements – on the construction of the nuclear power plant and the parallel operation of energy grids – at a session of the Union State Council of Ministers in Minsk on 15 March. Vladimir Semashko noted that these agreements open up the way for the further steps towards the construction of the nuclear power plant.

In general, the NPP construction project will benefit both Belarus and Russia: Belarus needs the NPP to diversity energy sources, while Russia will get contracts for several dozens of its enterprises.

First Vice Premier added that by 2013 Belarus is supposed to use local fuels to generate about 25% of the energy it needs. In 2010 the figure stood at 20.7%. By 2015 it is supposed to rise to 28-30%, said Vladimir Semashko. It is the level of developed nations such as Sweden and Denmark. Belarus will aim for it, he said. “We need to use what nature has given us as much as possible,” said the official.

The official reminded that projects for using local kinds of fuel are outlined by a relevant government program. The document will be used to build and commission 161 energy installations.

Nine hydropower plants will be built in Belarus by 2020, Vladimir Semashko told. The first one will be commissioned this year. It is a Grodno-based 17MW hydropower plant. Preparations are underway to build a hydropower plant in Polotsk (it will be commissioned in 2014) and Vitebsk (2015). “The projects are already in the pipeline. Documents are being worked on,” said Vladimir Semashko.

According to the First Vice Premier, the construction and commissioning of the hydropower plants is not a trifle matter but a way to handle Belarus’ energy security problems.