Agreement on the Procedure for Shaping, Control, Operation and Development of Single Markets of Oil
Name and Surname: Arailym Raikhanova
Date: 26.01.18
Word count: 416
Research Task One: Primary Legislative Acts
Document:
Act: Agreement (Соглашение)
Member countries: Belorussia, Russia, and Kazakhstan
Title: Agreement on the Procedure for Shaping, Control, Operation and Development of Single Markets of Oil and Petroleum Products of the Republic of Belarus, the Republic of Kazakhstan, and the Russian Federation
Commentary:
This is an agreement on the establishment of single market of oil and petroleum products between Belorussia, Russia, and Kazakhstan. It is based upon the agreements on the Custom Union between the Republic of Belarus and the Russian Federation, on the formation of a common economic space as well as on the establishment of the Eurasian Economic Community. The main aim of this agreement is to set the rules for access to services of natural monopoly entities in the field of gas transportation through gas transmission systems, which also includes issues of pricing and tariff policy in order to meet the needs of the member states of the common economic space. It implies that member countries have agreed to create a common market with fixed price, tariff, and taxes for gas transportation among themselves. As a result, this agreement was signed by the governments of Belorussia, Kazakhstan, and Russia on December 9, 2010 in Moscow.
Based on the agreement, member states have to create information exchange system including the data about domestic gas consumption, unify norms and standards for gas transportation as well as pass to market gas prices no later than January 1, 2015. The objectives of this agreement are to transport gas through the territories of member states, to build, reconstruct, and operate infrastructure facilities of the gas complex, and to provide service for member countries of common economic market. It should be mentioned that the implementation of the agreement is controlled by the competent authorities of member states. For example, Ministry of Energy of the Republic of Belarus, Ministry of Oil and Gas of the Republic of Kazakhstan, and Ministry of Energy of the Russian Federation.
The significance of this agreement is that it provides opportunities for gas consuming member states to purchase gas with market wholesale price, whereas for gas producing member states to have stable consumers without any external high tariffs and taxes. The establishment and development of single market means that each member state might benefit from low customs duties. Consequently, it would be economically profitable for all member states. Moreover, this agreement ensures environmental safety of gas, which, in turn, reduces supply of a substandard gas products that can lead to negative consequences for gas consuming countries. It also should be noted that this agreement helps to meet the internal necessities of member states. Finally, member states would seek to develop long-term mutually beneficial cooperation not only on the issue of gas transportation, but broader economic and political aspects.