The G7-led price cap on Russian oil exports has forced the Kremlin to raise the tax burden on producers, dealing a fresh blow to an energy sector already struggling with western sanctions, according to officials from the western coalition.
An analysis of the tax change by a member of the G7-led coalition, which was shared with the Financial Times, found that the move was likely to backfire by sacrificing the industry’s ability to invest for the long term in order to plug a gap in government finances.
“It is definitely destructive to their industry,” a coalition official told the Financial Times.
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