Russia has agreed to sell discount gas to Belarus for a price 60 per cent below what European countries pay.
Minsk will pay 164 dollars per cubic metre, instead of 244 dollars paid by its European neighbours.
The move forms part of Prime Minister Vladimir Putin’s vision of a Eurasian Union. He calls it an “integration discount”.
Belarussian leader Alexander Lukachenko has faced popular protests at home this year over rising prices and a plunging rouble.
A widening current account deficit means his goverment has been forced to sell off state assets.
Russia will also pay 2.5 billion dollars, or 1.8 billion euros, to gain complete control of the Belarus gas pipeline network, which carries 20 per cent of Russian gas sold to Europe.