TAX BREAK FOR RUSSIAN-US OIL JOINT VENTURES.

One of the fruits of last week’s meeting of the Gore-Chernomyrdin commission is a Russian promise to cut excise duties on oil exports for joint ventures from 55 rubles ($9) per ton to 20 rubles per ton. Chernomyrdin also reportedly guaranteed the ventures access to export pipelines. Fuel and Energy Minister Sergei Kirienko said that the concession will only cover five leading joint ventures, and would only apply for one year. The measure is designed to compensate the ventures for bureaucratic and tax problems they have encountered. (Russky telegraf, March 13, Itar-Tass March 12)

It is not only joint ventures in the oil sector that are feeling the pinch. The price of oil on the world market has reached a nine-year low, falling to $14 a barrel ($100 a ton) from $21 just six months ago. By world standards, Russian oil companies have high break-even costs, and as they export one-third of the oil they produce, the price fall threatens to wipe out their profitability. They are accordingly lobbying the government to cut taxes for all oil companies. (Kommersant-daily, March 12)

Most Russian commentators seem to take a somewhat skeptical stance towards the work of the Gore-Chernomyrdin commission. Some suggest that economic concessions are being made (for example, over nuclear trade with Iran) for the sake of political advantage. "The smiles of the commission co-chairmen do not reflect the objective picture of the state of Russian-US relations." (Nezavisimaya gazeta, March 13) From the American side, the actual concessions made by Chernomyrdin seem rather modest. Criticism of the commission’s work probably reflects lingering discontent with the overall policy of foreign trade liberalization which Russia has pursued since 1992.

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