Russia deepened cuts in natural gas supplies to neighbour Belarus on Tuesday over what it claims is a debt of nearly $200 million for previous gas shipments.

Alexei Miller, chief of Russia’s state—controlled Gazprom gas giant, said that the company decreased supplies by 30 percent starting Tuesday because Belarus has refused to pay the debt.

Gazprom initially reduced supplies by 15 percent on Monday and warned it would eventually cut deliveries by 85 percent if the debt was not cancelled.

Belarus, however, insists that Russia owes it $260 million in transit fees. President Alexander Lukashenko said on Tuesday in Minsk that he had ordered to cut the supply of Russian gas to Europe because Russia had not paid its bill.

Belarus’ debt will increase tomorrow

In Moscow, Gazprom spokesman Sergey Kupriyanov told reporters that Belarus’ debt would increase on Wednesday when the next month’s payment is due. He also said Gazprom would be willing to send observers to the Belarusian—Russian border to monitor whether Belarus was illegally siphoning off gas.

Spokeswoman Marlene Holzner said that the European Commission, the EU’s executive branch, expected that “the gas flows to the European Union will not be affected.”

Slightly more than six percent of total EU gas consumption comes from gas shipped through Belarus.

In a letter to the European Commission late Monday, the Belarus’ Energy Ministry warned that cuts of more than 15 percent could lead to transit shortages.

Gazprom has promised that European customers wouldn’t be affected by the shut—off since Gazprom could reroute gas supplies through another transit pipeline crossing Ukraine.

Russian President Dmitry Medvedev rejected Belarus’ proposal to pay off the debt in goods, saying that Russia needed “no pies, no butter, no cheese”, only cash.

Mr. Lukashenko on Tuesday described Mr. Medvedev’s words as an insult. “When they are trying to insult us with meat chops, sausage, butter or pancakes” we consider it as an insult for the Belarusian people,” he said.

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