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Qatar Airways expands further in South Africa with Airlink deal

Middle-Eastern airline Qatar Airways has signed an agreement with South Africa’s Airlink to expand its operations in South Africa.

The codeshare agreement will offer travellers more choice and improved connectivity between 45 destinations in 12 countries across southern Africa, Airlink said.  The group added that travellers will be able to purchase connecting flights on both airlines using one reservation.

Qatar Airways group chief executive, Akbar al-Baker, said expanding its network will give customers more choice of destinations and flights and contribute to the rapid recovery of travel, which plays an important role in South African economies.

Qatar Airways currently offers direct flights from Doha to Johannesburg 21 times weekly, Cape Town 10 times weekly, and Durban four times weekly.

The international airline has extended its presence in the African market by adding eight new destinations since the start of the pandemic, said Airlink.

The agreement will increase Qatar Airways’ footprint in southern Africa, with improved access to the following destinations:

  • Ggeberha (Port Elizabeth);
  • Hoedspruit;
  • Skukuza; and,
  • George.

Outside of South Africa’s borders, connectivity would be further extended into Africa, namely:

  • Botswana;
  • Namibia;
  • Zambia;
  • Zimbabwe; and,
  • Mozambique.

Airlink added that the new partnership would enable customers to book attractive offers from southern Africa to popular destinations in the U.S. such as New York and Dallas, cities in Europe such as London, Copenhagen and Barcelona, and points across Asia like Manila, Jakarta and Cebu.

“This development is an endorsement of Airlink’s relevance to providing air access to the entire region through our expansive network of destinations, which when considered in conjunction with Qatar Airways’ global reach creates unparalleled connectivity opportunities,” said Airlink’s chief executive Rodger Foster.

The new codeshare flights are available for sales and will commence travel on 6 July 2022, subject to government approval.

Prospective passengers can book their travel with both airlines through online travel agencies as well as with local travel agents.

Recent flight operations

South Africa’s domestic flight capacity has recently been in turmoil.

This follows airline Comair failing to secure the necessary funding to pull it out of financial distress with its business rescue practitioners deeming there no reasonable prospect for the company to be rescued.

As a result, Kulula and British Airways flights have been grounded since early June, leaving domestic airlines such as Airlink, FlySafair and Lyft adjusting to a 40% loss in domestic seat capacity.


Read: One of South Africa’s busiest highways is getting upgrades – what you should know

Price Hikes and Marriage Delays: Egyptian Youth Struggle to get Married Amid Economic Crisis


Price Hikes and Marriage Delays: Egyptian Youth Struggle to get Married Amid Economic Crisis

Photo via flickr

It all started on 21 March. As the Arab world prepared to celebrate Mother’s day, Egyptians woke up content, ready to honor mothers and maternal figures in their lives. To the surprise of many, however, it had not panned out as a day of celebration but as a day of panic. The Central Bank of Egypt (CBE) announced the devaluation of the Egyptian pound by 15 percent, with EGP 18.1 for buying and EGP 18.2 for selling, down from EGP 15.6 and EGP 15.7 respectively the night before.

After public speculation and circulating rumors in Egyptian streets, the CBE confirmed people’s fear in an unannounced move, attributing its decision to global inflationary pressures, the Ukraine war, and the repercussions of the COVID-19 pandemic.

Although the country is still grappling with a vulnerable economy, this unexpected hit comes six years after the currency float in 2016, which reduced the Egyptian Pound’s value by almost 50 percent against the United States Dollar as part of the country’s economic reforms.

Following the Russian invasion of Ukraine, the Egyptian economy had continued to suffer, as both countries are considered Egypt’s biggest suppliers of tourists, and its top two importers of wheat.

This created a ripple effect in the economy, forcing prices to soar. Those particularly feeling the pinch? Egypt’s soon-to-be wed.

Photo via Wedding Maps

How did this affect the 103 million-strong population?

Engaged in May 2021, Bishoy Sabry, a senior operations agent at a real-estate company, and his fiancée, had initially planned to get married by September 2022. Today, they hope to get married in April 2023.

“It was a joint decision. We decided that it’s more important for us not to lose our peace by constantly trying to keep up with the price hikes. We realized that we will do what we can, and leave the rest in God’s hands,” Sabry tells Egyptian Streets.

Whether it was the furniture, the electrical appliances, or the construction work for his apartment, Sabry complains the prices differ by the day, and that the couple can barely keep up.

“A few months ago, the cooker that we wanted to buy was priced at EGP 6,400 (USD 341) with a seven-year warranty, then it increased to EGP 7,400 (USD 395), and now it’s for EGP 9,800 (USD 523) with a five-year warranty. That wasn’t all; for a long time, the cooker was not even available in the market,” adds Sabry, voicing his frustration.

As part of the finishing work on his apartment, Sabry was initially told the aluminum work for two windows would cost him EGP 4,000 (USD 213). Today, it will cost him approximately EGP 6,800 (USD 363).

“Two wooden windows were for EGP 2,000 (USD 107), today they cost EGP 3,400 (USD 181), that is without calculating the extra money that I’ll be paying to the carpenter himself, other than the glazing of course.”

Since Sabry was still working on the final stages of the construction of his apartment, from flooring and painting, to facing and plastering, he had no way of buying the furniture early on, which is now about double the price in most stores.

In Egypt, cultural traditions stipulate that couples prepare every bit in their new home, from appliances to furniture, while steering clear of rentals.

“I don’t understand the reason for these constant price increases. I feel like traders take advantage of the situation and keep increasing their prices. Many appliance stores claimed that the products were out of stock or unavailable, so they can sell them later for higher prices. We’ve been witnessing unjustified greediness from the traders and absolutely no reaction from the government to put any limits to their actions,” Sabry argues.

Taking initiative, 33-year-old Sabry approached the Egyptian Consumer Protection Agency (CPA), who he recounts were professional and prompt in their communication. However, their answer was that they had no directives for implementing a forced pricing policy to date.

Having said that, Sabry is not the only groom struggling.

Together with his fiancée, 26-year-old mathematics teacher Nora Atef, 29-year-old accountant, Bvnoty Yacoub, was also forced to postpone his wedding plans for several months due to the rising prices in Egypt.

“We got engaged in February 2022, and we were planning on getting married in October 2022. Now, we are just hoping we get married by May 2023, and hopefully not postpone more than that,” says Yacoub. “The budget that we have was going to cover our expenses, but now it definitely won’t.”

Cost-cutting and reduction of expenses

Recently, Al Azhar Islamic Research Academy launched “Li Taskono Ilayha” (To live in tranquility with them), an initiative that calls for saving the costs of marriage.

The initiative addresses engagement, preparation for marriage, and marriage itself, and ways to cut down on expenses throughout these phases. In addition to its recommendation of canceling travel abroad for honeymoon and canceling the wedding photo session, the initiative advised families to agree on the shabka (a gift from the groom to the bride, traditionally a gold set, and most recently a diamond ring in some cases) according to its value instead of weight, and to postpone purchasing unnecessary furniture items.

“We initially planned to travel abroad for our honeymoon, and we still want to, but we don’t know what the prices will be like closer to our wedding date, and whether it’s going to be feasible for us to travel out of the country or not,” adds Yacoub.

Furthermore, many couples have started to reduce the number of products they choose to buy, postponing or disregarding inessential purchases.

“Although air conditioning (AC) is a main appliance in most homes nowadays, we decided we can buy a fan instead, and upgrade to an AC later on when we have fewer appliances to buy,” says Sabry.

Similarly, Yacoub and Atef chose to postpone purchasing a few items that they considered unnecessary, such as the children’s bedroom, the microwave, and the AC.

The bride’s journey

In addition to buying their wedding dresses, most Egyptian brides are expected to buy new clothes, lingerie, and loungewear prior to marriage.

In the past few years, many brides began resorting to renting their wedding dresses instead of buying them due to unattainable prices which can see certain gowns reach up to EGP 55,000 (USD 2,931). Shops offer numerous renting options for brides, such as first use, where the bride is the first to rent it, and second use, where the dress has been rented before. This is usually the most cost-efficient option.

Photo via The Jakarta Post

In Atef’s case, after one stroll in a few wedding dress shops, seeing the prices, she helplessly decided to “just leave it for now”.

It is popular belief that most Egyptian parents often prefer not to prolong the engagement period, limiting it to a maximum of one year, as they assume that the longer the engagement, the more room it leaves for problems to form between the couple and their families.

“My mom didn’t want our engagement to last longer than a year, but after she witnessed what has been happening, she understood that we have no other option,” explains Atef.

Unfortunately, the current circumstances have forced many young couples to delay their wedding plans, all while hoping they can still eventually get married.

“We love each other so much and we can’t wait to get married, but money is our main obstacle,” concludes Yacoub.

UN Concludes Palestinian Journalist Shireen Shireen Abu Akleh Killed by Israeli Forces


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Meta to bolster antitrust defence with data from TikTok, WeChat, and Telegram

Meta Platforms Inc. won a judge’s backing to obtain information from ByteDance Ltd’s TikTok, Tencent Holdings Ltd’s WeChat and Telegram Group Inc. to bolster its defence against an antitrust lawsuit by the US Federal Trade Commission.

US District Judge James Boasberg on Wednesday wrote letters to China’s Ministry of Justice seeking help with getting documentary evidence from Tencent and ByteDance, and sent a separate letter to officials in the British Virgin Islands concerning Telegram.

Boasberg explained in the letters that he wants user data and communications or presentations to executives and board members examining competition between the companies’ apps and Meta’s Facebook, Instagram and WhatsApp platforms.

Meta had told Boasberg that it needs data on each company’s user base and market share to defend itself against the FTC’s suit, which alleges Meta monopolised the personal social networking market and seeks to force it to spin off its Instagram and WhatsApp units.

Efforts to obtain the information from the US units of the companies were unsuccessful, Meta said.

The Menlo Park, California-based social media giant had asked the judge to issue orders that would allow it to officially seek evidence from outside the US.

The FTC’s suit was initially thrown out by Boasberg, who said the agency didn’t clearly explain how it determined Facebook’s market share.

The FTC then filed a revised version of the complaint last summer that the judge ruled in January could proceed.

The case is Federal Trade Commission v. Meta Platforms Inc., 20-cv-03590, US District Court, District of Columbia.


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Sol Plaatje municipality denies ‘hefty’ winter power markups, says Eskom’s rates are higher


Eskom CEO André de Ruyter.

Photo: Gallo Images/Rapport/Deon Raath

  • A Northern Cape municipality says remarks by Eskom’s CEO about how much it charges for power risk “agitating” communities into shutting it down. 
  • De Ruyter said he could understand public frustrations about the cost of electricity given “hefty” municipal markups. 
  • Sol Plaatje municipality has denied charging markups of up to 121%, and has accused Eskom of having the more expensive power. 

Sol Plaatje municipality in the Northern Cape says it has written a letter of complaint to SA’s electricity regulator after Eskom CEO André de Ruyter singled it out for charging “hefty” winter increases.

The municipality is not only denying the mark-up was as large as De Ruyter claimed, but has gone on the offensive to accuse Eskom of charging higher rates to come customers it supplies directly. 

De Ruyter made the comments in an interview with political analyst David Ansara of the Centre For Risk Analysis in late May. 

Speaking about public unhappiness with the cost of electricity, De Ruyter said some municipalities added a “very hefty markup” to the tariffs that Eskom charged them.

“In the case of Sol Plaatje municipality, which is Kimberly, [there is] as much as a 121% markup. So when people complain about the cost of electricity – yes in some cases it is true.”

But the municipality has denied it is charging a markup of 121%, saying the true amount was 68%. 

“The comments of Mr De Ruyter are factually incorrect and unfortunate as they erode the commercial value of the electricity business in Kimberley, they cause confusion and agitate customers,” the municipality said.

The municipality’s council has also taken a decision to ask the National Energy Regulator of South Africa (Nersa), which has to approve all tariffs, for help. 

“Nersa must assist council to deal with the CEO of Eskom, Mr De Ruyter, in terms of recent statements that he made on electricity increases,” states the resolution, which doesn’t say how it expects the regulator to do this. 

When asked to confirm Sol Plaatje’s calculations, Nersa referred Fin24 to its website, saying tariff rates were available there. 

Calculations 

When Fin24 approached Eskom to explain how it calculated the 121% figure, the utility said it calculates markups by comparing the tariffs it is allowed to charge municipalities with the tariffs they pass on to customers. 

It said it is allowed to charge municipalities R1.4648 per kilowatt-hour. The municipality, meanwhile, charges certain commercial users a tariff of up to R3.0203 per kilowatt-hour in winter, when demand is highest.  (The rate of R3.0203 per kWh does not apply to residential customers.)

EXCLUSIVE | Eskom’s De Ruyter threatened to quit three months into the job: ‘Either he goes, or I go’

The percentage change between the two figures is 106%. While this is not the 121% referenced by Eskom, it is in the same ballpark. 

Sol Plaatje, meanwhile, has disputed Eskom’s figures. It said its purchase cost for Eskom during the 2020/21 winter months was R1.7982 per kWh. 

“This makes the markup of the R3.0203/kWh equal to 68%,” states a document prepared by a consultant. 

But the municipality is not leaving it there. It has now accused Eskom of charging tariffs way above R3.0203 per kWh for some types of electricity it supplies directly to customers. 

“For the typical Sol Plaatje commercial consumer, Eskom tariffs would be more expensive by either 39% 71%, 129% or 29% depending on which Eskom tariff [is used]”

Eskom, meanwhile, seems to see little point in continuing to engage in price calculations via the media. 

The utility told Fin24 that it had “already provided data that supports the pricing information in question”.

“At any rate is public information, has no intention of engaging in a media brawl with any of its customers or stakeholders.”

“We shall enter into no further correspondence in this regard.”

But the municipality is hoping the Nersa will bring finality to the spat. 

Why? It says it fears that De Ruyter’s comments could “agitate communities into [shutting]  the city down” or even “vandalism and looting of commercial”.

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Go to the Fin24 front page.

Signs of forced labor found in China’s EV battery supply chain: Report

Hundreds of Uyghurs are working for a mining conglomerate that produces raw materials for electric vehicles as part of a so-called work transfer program in China, the New York Times reported.

Shen Longquan | Visual China Group | Getty Images

Chinese companies that produce raw materials for electric vehicle batteries show indications of using forced labor, according to a report from The New York Times.

The newspaper reported that mining conglomerate Xinjiang Nonferrous Metal Industry employs hundreds of Uyghurs, an ethnic minority in China, as part of a so-called work transfer program.

The Times reported China has acknowledged running such a program that moves Uyghurs and other ethnic minorities from the south of Xinjiang to the north to work in industrial jobs.

The Chinese embassy in Washington did not immediately respond to a CNBC request for comment.

The U.S. State Department previously noted, citing an independent researcher, that transferred workers are at risk of being subjected to forced labor. It has also previously cited Chinese academic publications that “described labor transfers as a crucial means to fragment Uyghur society and mitigate the ‘negative’ impact of religion.”

In social media posts translated by the Times, Xinjiang Nonferrous said workers from mostly Muslim minorities were lectured on “eradicating religious extremism” and becoming workers who “embraced their Chinese nationhood.”

Chinese authorities have repeatedly denied that the country imprisons or enslaves Uyghurs. On Tuesday, Chinese Foreign Ministry spokesperson Wang Wenbin said the claims of forced labor in Xinjiang are a “huge lie made up by anti-China forces to denigrate China.” He said the rights of workers of all ethnic groups in Xinjiang are duly protected.

Xinjiang Nonferrous Metal Industry produces minerals and metals, including lithium, nickel and copper. It has exported metals to the United States, Germany, U.K., Japan and India, the Times reported. It’s unclear whether these relationships are ongoing, however, the New York Times reported.

The report was published on the eve of the Uyghur Forced Labor Prevention Act taking effect in the United States. The legislation bans goods made with forced labor in Xinjiang from entering the U.S. market.

The Times reported that thousands of companies could have some link to Xinjiang in their supply chains. If fully enforced, many products, including some needed for electric vehicles, may be stopped at the border.

Read the full report in the New York Times.

Hiltzik: Allegations of a Getty family tax dodge

For all that we may be getting fed up with the hijinks of billionaires trying to use their fortunes to get their way in business and government, the lifestyles of the rich and famous still have the power to fascinate and shock.

Consider a lawsuit filed last month in Brooklyn Federal Court by Marlena Sonn, who describes herself as an investment advisor to two of the three daughters of Gordon P. Getty, the heir to the late oil tycoon J. Paul Getty.

Sonn asserts that she helped the Getty offspring reposition their investment portfolios to stress “socially responsible” ventures, in part to help them make “reparations … for the fact that the origin of their tremendous wealth was inextricably intertwined” with climate change and the despoliation of the Amazon Basin.

As one who will be paying for all these avoided taxes and these expensive out-of-state meetings, I find it distasteful.

— Nicolette Getty, objecting to the family’s alleged California tax dodge

Her advice, she says, produced great financial success for the clients’ trusts, raising the value of a key trust to more than $1 billion from $600 million in the space of a few years.

But it all came apart, she says, when she started questioning the trusts’ practice of portraying them and their beneficiaries as domiciled in Nevada, even though they spent most of their time in California or New York.

The goal, Sonn alleges, was to evade at least $300 million in California taxes from 2013 through 2021, the period during which she worked for two of the three sisters. That’s Sonn’s estimate of the taxes that may be owed by the one Getty trust in which the sisters have an interest, which is known as the Pleiades Trust. But there are other Getty trusts; if they all follow the practice that Sonn alleges about Pleiades, the amount at issue could be in the billions.

Sonn says her recommendation that they swallow their medicine and get right with California law led to her being fired in retaliation and cheated out of more than $4 million in pay she had been promised.

Sonn filed her lawsuit on May 11, naming Kendalle and Alexandra Getty, their personal investment funds and Robert L. Leberman, who administers several of the Getty family trusts and manages assets for Gordon Getty.

A few words of caution. Most of the defendants haven’t yet responded to the lawsuit, so we don’t know how they would describe their relationship with Sonn. The defendants’ lawyers either declined or didn’t respond to my requests for comment.

Kendalle Getty, however, did sue Sonn in Reno state court about two weeks after Sonn filed her case. In her lawsuit, which has been transferred to federal court in Nevada, Getty alleges that Sonn “coerced” and “pressured” her into guaranteeing Sonn a $2.5-million payout when Getty fired her.

Sonn’s lawsuit bears the hallmarks of an act of vengeance. Taken at face value, it says that Sonn learned that the sisters and their other family advisors were pushing tax law beyond reasonable limits, she advised her clients to stop doing so, and that in retaliation they fired and stiffed her.

Still, Sonn’s allegations are now in the public record, and effectively serve as a roadmap for California tax investigators, should they choose to follow the route. So it’s proper to give them an airing.

Before that, however, let’s remember how the sisters fit into Getty family history.

Their forebear, J. Paul Getty, was judged in the 1950s to be the richest man in the U.S., and possibly the world, thanks to a fortune built from oil wells in Oklahoma and Saudi Arabia.

Getty was also known as a world-class skinflint, famous for having a pay phone installed in his English mansion for guests and for refusing to pay the ransom demanded by kidnappers of his grandson John Paul Getty III, instead lending his own son part of the money and charging him interest on the loan.

Among the manifestations of his fortune and art collection are the Getty Center and Getty Villa in Los Angeles.

Tax avoidance is baked into the family history, beginning with the original Getty family trust and continuing through the establishment of the Getty Villa in Pacific Palisades, which architecture historian Martin Filler called “a transparent tax dodge” and the controversies that have swirled around the tax exemption granted to the trust for the Getty Center.

Gordon P. Getty, 88, is J. Paul Getty’s fourth son and heir. Though he originally entered the oil business himself, he preferred to make his career as a classical music composer. In 1986, 10 years after the death of his father, Gordon sold Getty Oil to Texaco for $10 billion.

Gordon had four sons, as far as was known to the outside world. In 1999, however, the news emerged that he also had three daughters by a longtime mistress, Cynthia Beck — Nicolette, Kendalle, and Alexandra. This became public when the sisters filed a petition, which was granted, to change their names from Beck to Getty.

Gordon Getty openly acknowledged paternity: “Nicolette, Kendalle and Alexandra are my children,” he said. “Their mother, Cynthia Beck, and I love them very much.”

Of the three sisters, all of whom are in their 30s, Kendalle, an avant-garde multimedia artist, may be the most prominent as a public figure. Nicolette isn’t a named defendant in Sonn’s lawsuit and doesn’t appear to have been a Sonn client.

The Getty family trust, of which Gordon and his sons are beneficiaries, was restructured by creating a successor, known as the Pleiades Trust, to benefit his daughters. Gordon became the principal beneficiary of Pleiades, which the lawsuit says his daughters will inherit after his death. From 2015 through 2020, Sonn asserts, Gordon received about $176 million from the trust. The sisters received modest fees and loans from their father.

Sonn entered the story in 2013, when she says she took over the management of Kendalle’s $5-million portfolio from Goldman Sachs.

Kendalle wanted her investments to reflect her “progressive … interests, ethics, and values,” Sonn recounts; Goldman Sachs had invested her money largely in broad market funds. Alexandra became Sonn’s client later that year. Sonn began attending the quarterly meetings the three sisters had with their father regarding the management of Pleiades.

Sonn says she became more than a financial advisor to Kendalle, who “regularly turned to Ms. Sonn for advice on interpersonal relationships with various family members, roommates, and/or romantic partners.”

She says that “anytime that Kendalle was in crisis, she would call on Ms. Sonn … to clean up her messes and help her navigate personal troubles.” Sonn says she was paid a total of about $180,000 by Kendalle and Alexandra, plus bonuses at the sisters’ discretion.

Kendalle, in her own lawsuit, acknowledges that over the years she came to “unconditionally trust, accept, and depend upon” Sonn. She alleges that Sonn used that relationship to arrange an “inflated” bonus, which Sonn disputes.

Sonn says she eventually learned that much of the management of the Pleiades Trust was designed to preserve the “fictional” impression that everything connected with the trust was domiciled in Nevada, including its clients.

This was important, she says, not only because Nevada has no income tax, but because it has become a recognized tax haven thanks to financial secrecy laws not unlike those of the Cayman Islands.

The first glimmer of this strategy, she says, came when a trust official told her that New York state taxes wouldn’t be withheld from her paychecks, even though she lived and worked in the state.

The idea was to eradicate any indication that the trust did any business in New York, a high-tax state. The main goal was to show that the trust did all its business in Nevada — especially not in California, even though “everyone knew” that much of the trust’s business “was continuously being conducted in and/or from Los Angeles or San Francisco,” Sonn says.

Things came to a head in 2018, when all three sisters were mostly living in California and became aware of the state’s “throwback” rule, which allows California to tax trust income if it determines that the recipients were state residents at the time they received the money and while it was accumulating in the trust.

The Getty family, Sonn asserts, was counting on its political pull in California to minimize that possibility, but that was a “calculated risk.” Among their connections is Gov. Gavin Newsom, whose father, Bill, was a lifelong friend and a financial manager of Gordon Getty. Gordon, who is now a business partner of Gavin Newsom’s, and other family members have contributed hundreds of thousands of dollars to Newsom’s political campaigns over the years.

The burden of hiding their California presence began to weigh on the sisters, according to Sonn. Her lawsuit says they wanted to live openly in California and stop worrying about taxes.

Nicolette allegedly complained to Leberman in an email about the cost of the strategy, which included “quarterly out-of-state meetings for 30+ people in expensive hotels … using private jets, etc. … As one who will be paying for all these avoided taxes and these expensive out-of-state meetings, I find it distasteful.”

According to the lawsuit, “Ms. Sonn repeatedly encouraged Kendalle and her sisters to just pay the California taxes.” Sonn says that eventually all three sisters fell into line with Leberman’s advice about continuing what she calls “the dubious tax avoidance scheme. … Ms. Sonn’s dissenting views on the matter were no longer welcome.”

She says Alexandra fired her in January 2021 with a commitment for a $2.5-million severance payment, but later tried to settle for $30,000. Sonn says she’s seeking “fair and just compensation” via the lawsuit. She says Kendalle separately agreed to a $2.5-million severance, split into three annual installments of $833,333, but paid only the first.

There are lessons to be drawn here, though they’re necessarily conditional, given that we now have only one side of the story.

If there’s a corollary to Benjamin Franklin’s observation about death and taxes being the only certainties in this world, it’s that the 1% will defend their tax breaks to their last drops of blood.

Even if Sonn’s lawsuit is an act of revenge, it could still serve a public service. If she’s right that Gordon Getty and his daughters ripped off the state of California to the tune of $300 million or more, don’t overlook that you, the ordinary taxpayer, got the bill.

Latest Stock Market and Business News: Live Updates

Credit…Tatiana Meel/Reuters

A surge in demand from Asia for discounted Russian oil is making up for the sharply lower number of barrels being sold to Europe, dulling the effects of the West’s efforts to punish Moscow over its invasion of Ukraine and keeping revenue flowing to the Kremlin.

Most of the additional oil has gone to two countries: China and India. China’s imports of Russian oil rose 28 percent in May from the previous month, hitting a record high and helping Russia overtake Saudi Arabia as China’s largest supplier. And most of the increase went to India, which has gone from taking in almost no Russian oil to bringing in more than 760,000 barrels a day, according to shipping data analyzed by Kpler, a market research firm.

Although South Korea and Japan have cut back on Russian oil, those volumes are a fraction of what is being bought by China and India.

“Asia has saved Russian crude production,” said Viktor Katona, an analyst at Kpler. “Russia, instead of falling further, is almost close to its prepandemic levels.”

Russian oil is being sold at a steep discount because of the risks associated with sanctions imposed to punish Russia for its invasion of Ukraine. Even so, soaring energy prices have led to an uptick in oil revenue for Russia, which took in $1.7 billion more last month than it did in April, according to the International Energy Agency.

Although it remains to be seen how much Asia will continue buying the oil as Europe weans itself off Russian energy, the shift has allowed Moscow to maintain its production levels and defy analysts’ expectations that its output would plunge. And it has offered another indication of the support Russia enjoys from China, whose top leader, Xi Jinping, has offered to deepen cooperation with Moscow despite its invasion of Ukraine.

Russian crude sales dropped by 554,000 barrels a day to Europe from March to May, while Asia refiners increased their take by 503,000 barrels a day — nearly a replacement of one for one. Of those, 165,000 barrels are going to China from eastern Russian ports instead of the Baltic and Black Sea ports that traditionally supply Europe. Russian sales to India reached a record 841,000 barrels a day in May, eight times the annual average from last year.

J.P. Morgan commodities experts estimate that China can buy an additional million barrels of Russian crude a day as China recovers from Covid and attempts to add to its strategic crude stockpiles on the cheap. Russian Urals crude is selling for a $30 discount to Brent.

The combination of discounted Russian crude and higher prices at the pump also means that Indian refiners are doubly profiting, according to analysts. Some of the oil products re-exported by India went in shipments bound for the United States, Britain, France and Italy, according to the Finland-based organization Center for Research on Energy and Clean Air.

There was the hope that threatened sanctions against those who insured Russian shipments would stick. But while financing shipping vessels has increased costs, the discounts are so steep that China, India and other Asian buyers are buying.

Once they refine oil into diesel, no one can distinguish whether the products that are sent to Europe and elsewhere come from Russian crude. JP Morgan estimates that Russia can find shipping capacity to transport about three million barrels a day of oil to Asia, and state-run Indian and Chinese insurers will take care of the insurance.

“Those molecules, a lot of them are Russian,” Jeff Brown, the president of F.G.E., an energy consulting firm, said of the refined oil that is being re-exported to the West. “That’s the core tension — they want to punish Russia, but they don’t want oil prices to go up.”