“The Energy Charter includes specific provisions on transit and transit tariffs, and I encourage both sides to use the Charter’s principles and rules as the basis for an acceptable and swift settlement.”

Both Russia and Belarus apply the Energy Charter Treaty on a provisional basis, and the Treaty in its Article 7 includes an obligation to facilitate energy transit in line with the principle of freedom of transit (Art. 7.1) and not to interrupt or reduce established energy transit flows (Art. 7.6). There is a specific conciliation procedure for transit issues included in the Treaty (Art. 7.7), and this procedure is available to the parties as a means to resolve a dispute over energy transit.

The Energy Charter Treaty does not interfere in negotiations about pricing or other elements of energy supply arrangements that are negotiated between member countries or their commercial entities.

In relation to transit tariffs, the basic principle established by the Energy Charter Treaty is that tariffs should be non-discriminatory, and also that no party shall impose unreasonable delays, restrictions or charges on energy products in transit.

A draft Energy Charter Protocol on Transit, which is being negotiated by the member states of the Energy Charter, would specify in addition that transit tariffs should be reasonable, non-discriminatory and cost-based. Cost-based tariffs means that they need to be based on operational and investment costs, including a reasonable rate of return. 

The Energy Charter Treaty does not prescribe a specific methodology for setting transit tariffs. Within the overall framework established by international agreements, it is for the relevant national authorities to design tariff methodologies that best reflect the specifics of their country's energy transportation and transit system. As part of its work with member states on the implementation of the Energy Charter Treaty, the Charter will release shortly an analysis of oil transit tariffs in selected countries, as well as a report on international oil and gas pricing mechanisms. 

On the negotiations regarding natural gas supply and transit

At the same time, the Secretary General also commented on the settlement of the negotiations on natural gas between Russia and Belarus, that were concluded on 31 December. 

"Gazprom's intention to move to new commercial terms for gas deliveries to neighbouring states has been clear for some time," commented the Secretary General.

"As a matter of principle, the Energy Charter stands in favour of market-based pricing mechanisms for energy as the most efficient way to allocate a scarce resource; I welcome the fact that a resolution was found between the parties that avoided the risk of interruptions to gas supply, and hope that an acceptable agreement can also be found in relation to oil."

Amb. Mernier had made a statement on 30 December 2006, in which he called for a swift settlement of these negotiations on the basis of the principles of the Energy Charter, noting at that time that “it is important that an acceptable resolution be found as soon as possible in order to avoid the risk of interruptions to energy supply through Belarus into other European markets."