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Is the government planning to tax oil sharks in the middle of an energy crisis?

RIYADH- Saudi Aramco CEO Amin Nasser said taxing oil companies and capping energy prices is not a long-term solution to the global energy crisis, urging the sector to take action. Is the government resorting to taxing oil sharks as a way out in the middle of an energy crisis?

European governments have slashed taxes, subsidies, and cuts to deal with an energy crisis that is fueling inflation, forcing industries to halt production and raise bills before winter. pouring hundreds of billions of euros into subsidies. 

An EU plan announced last week would siphon excess profits from energy companies and redistribute them to reassure consumers.

Nasser, who heads the world’s largest oil exporter, said the continued underinvestment in the hydrocarbon sector was a major cause of the problem, at a time when alternatives to fossil fuels were not yet readily available. is said to be one. 

At a forum in Switzerland, Nasser of Saudi Aramco said, “Energy price freezes and caps may help consumers in the short term, but they are more long-term solutions than addressing the real causes. not a measure. ”

 “A fear factor is still causing the critical oil and gas investments in large, long-term projects to shrink. And this situation is not being helped by overly short-term demand factors dominating the debate.

Even with strong economic headwinds, global oil demand is still fairly healthy today. But when the global economy recovers, we can expect demand to rebound further, eliminating the little spare oil production capacity out there. And by the time the world wakes up to these blind spots, it may be too late to change course. That is why I am seriously concerned.”

Aramco has invested in increasing Saudi Arabia’s oil production capacity to 13 million barrels per day by 2027, but Nasser said global investment in hydrocarbons is still “little.” Too late, too late, too short notice.

“As the pain of the energy crisis sadly intensifies, people around the world are desperate for help. In my view, the best help that policymakers and every stakeholder can offer is to unite the world around a much more credible new transition plan, driving progress on the three strategic pillars I have outlined this morning… That is how we deliver a more secure and more sustainable energy future.”  

The oil and gas industry has been discredited from the outside due to climate and social misperceptions, creating a stigma that has affected its investment attractiveness, said KAPSARC in a report. 

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