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updated 6/21/2010 5:15:15 AM ET 2010-06-21T09:15:15

Russia on Monday cut natural gas supplies to ex-Soviet neighbor Belarus over what it claims is a debt of nearly $200 million for gas already provided.

President Dmitry Medvedev met early Monday with Alexei Miller, the chief of state-controlled gas monopoly Gazprom, and in televised remarks ordered him to implement cuts "to protect the interests of the Russian state."

Miller said the company would gradually cut gas supplies to Belarus by 85 percent, the remainder serving to maintain its pipeline that is also used for transit of Russian gas supplies to other parts of Europe.

Russia last week warned Belarus to start paying off the debt or face cuts . Belarus has challenged the Russian claim and refused to pay.

Miller has said that European customers won't be affected as the company can channel gas supplies normally going via Belarus to another transit pipeline crossing Ukraine. Also, gas consumption in summer is low compared with its peak in the winter and the pipelines aren't filled to full capacity.

Moscow-based Metropol investment bank also said in a note to investors that the shutdown is unlikely to hurt Gazprom's customers in Europe during the low season. "Gazprom could ship the gas through Ukraine to Poland and on to Germany," it said, adding that the conflict will likely be resolved quickly.

Russia has cut gas supplies to both Ukraine and Belarus several times in recent years due to payment disputes, and many European consumers have suffered amid freezing winter temperatures.

Strained relations
Russia is Belarus' main ally and sponsor, but relations between the two former Soviet countries have been strained by financial arguments.

"The Kremlin wants to remind (Belarus President Alexander Lukashenko) who is sponsoring the Belarusian economy," said Sergei Chalyi, an independent Belarusian economic analyst.

Belarus' economy has been struggling to cope with rising Russian natural gas prices and excise hikes on Russian oil imports. Lukashenko has insisted that Russia provide it with cheap oil and gas as part of the customs union deal to come into force July 1, but Moscow has rejected the demand.

Gazprom insisted that Belarus must pay $187 per 1,000 cubic meters of gas this year, but Belarus insisted it should be charged only $150.

Lukashenko said last week that Belarus owes nothing to Gazprom and warned Moscow that it could lose its ally. "It's unacceptable to treat an allied state like that," he said.

Belarusian officials have contended that Russia owes an equally large sum for the transit of natural gas via Belarus to European consumers — a charge Gazprom has rejected.

Some other observers said that Moscow also might have punished Lukashenko for offering asylum to Kyrgyzstan's toppled President Kurmanbek Bakiyev. Kyrgyzstan's new rulers have accused Bakiyev of instigating ethnic violence that has killed up to 2,000 ethnic Uzbeks in southern Kyrgyzstan and forced another 400,000 to flee for their lives. Bakiyev has denied playing any role in the unrest from his refuge in Belarus.

"The Kremlin knows about Bakiyev's involvement in staging riots in southern Kyrgyzstan and is giving an exemplary punishment to Lukashenko for his support of the ousted president," said Alexander Klaskovsky, an independent Minsk-based political analyst.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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