Gas prices will reduce competitiveness of Belarusian nitrogen fertilizers
The difference in the price for natural gas in Ukraine and Belarus has decreased to 35%. In 2015, due to lower prices for natural gas, Grodno Azot increased exports of nitrogen fertilizers to Ukraine by 16 times in value terms; gas costs make more than 50% of the nitrogen fertilizers production cost. Due to the overall fall in prices on natural gas in Ukraine and in the world, the price of nitrogen fertilisers is likely to reduce and Belarusian producers may lose their positions on the neighbouring markets. Since natural gas prices for Belarus would remain at the level of 2015, fertilizers’ production costs will grow, proceeds will fall, and enterprises modernisation investment projects will be put off. In December 2015, Grodno Azot net profits reduced by more than BYR 200 billion. If such trends persist, Grodno Azot will no longer be among the 10 most profitable companies in Belarus.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.