Turning Russian Oil Into A Tax Gusher

When it comes to wealth and poverty, some Russians are pretty vocal these days. "Return the nation's wealth to the people!" ran one opposition slogan during December's parliamentary elections. "Russia is a rich country, but its people live in poverty!" said another. No sector of the economy seems to arouse as much ire as oil, one of Russia's premier industries -- and a business that has made multibillionaires of a few tycoons. "The population feels that it's not fair that a small group of people got billions of dollars from exploiting natural resources when half the people live in poverty," says Sergei Glazyev, co-head of Rodina (Motherland), a new leftist party that won 36 seats after promising to use oil-company profits for social needs.

Oil businesses are by far Russia's largest taxpayers, ponying up a fifth of the national government's budget. But President Vladimir V. Putin, who stands for reelection in March, can't ignore adversaries such as Rodina if he wishes to maintain his 80% poll rating. No surprise, then, that growing evidence indicates the Kremlin wants to squeeze extra money from oil drillers. In a December TV appearance, Putin supported higher oil taxes, pointing to the "superprofits" enjoyed by oil companies because of recent price jumps. Not long afterward, Yukos, Russia's No. 1 producer, was handed a $3.5 billion bill for levies it allegedly failed to pay in 2000. That invoice followed the arrest in October of former Chief Executive Mikhail B. Khodorkovsky on tax evasion and fraud charges.