CEOL - Russia reportedly agrees on fuel supplies to YU

BELGRADE, Dec 13, 1999 -- (Reuters) Russia has agreed on the delivery of new supplies of gas, diesel and fuel oil to Yugoslavia and on how to pay for the deliveries, news agencies said on Sunday.

"We found various possibilities for the delivery of Russian gas, diesel fuel and heavy fuel oil, and problems with payments have been resolved," visiting Russian Economics Minister Andrei Shapovalyants was quoted by Yugoslav state news agency Tanjug as saying.

Yugoslavia has depended heavily on Russian fuel since NATO's March-June air war over Belgrade's repression of ethnic Albanians in Kosovo destroyed many of its stores.

The West has so far refused to finance reconstruction in Yugoslavia or lift a fuel embargo or other sanctions while Yugoslav President Slobodan Milosevic remains in power.

Moscow condemned the bombing and helped to end it by persuading Milosevic to accept a United Nations resolution allowing a NATO-led peacekeeping force into the province.

Russia's Interfax news agency said Shapovalyants had agreed with his Yugoslav hosts on financing fuel supplies for the autumn-winter period and on setting up a free trade zone.

It also said Russian firms would be given concessions in road repair projects and would be allowed to take part in the privatization of Yugoslav industry in return for helping to rebuild industrial infrastructure damaged during the war.

Tanjug did not mention any equity deal but said Russia had extended a state credit to Yugoslavia, without elaborating.

Interfax did not refer to a credit in its report on the results of the meeting, saying only that Shapovalyants had pledged fuel aid to Yugoslavia.

The two sides planned to sign an agreement on the liberalization of bilateral trade by the end of the year, Tanjug said, citing Shapovalyants as saying they planned to boost trade turnover to $2 billion in the near future.

Neither report gave any details as to current trade turnover or the size of the fuel supplies.

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