Israel Oil Refineries in Palestinian supply deal

JERUSALEM - Agence France-Presse

Palestinians wait to fill containers with fuel outside a petrol station in Khan Younis in the southern Gaza Strip April 10. REUTERS photo

Israel’s Oil Refineries has announced a contract to sell petrol and diesel fuel to the Palestinian Authority worth 1.9 billion shekels (391 million euros/$487 million) a year.

The deal, which would supply 50 percent of the PA’s fuel needs, is to run for an initial two years from October 1, the company said in a statement to the Tel Aviv Stock Exchange late on Monday.

The remainder of the PA’s fuel is to be supplied by Israeli company Paz Oil.

In an attempt to end a severe electricity crisis in the Hamas-run Gaza Strip, the PA and Hamas recently reached an agreement to supply the coastal enclave’s main power station with fuel purchased from Israel.

The two authorities agreed that the daily cost of the 500,000 litres of fuel for the plant would be met by revenue collected from customers by the Gaza electricity company.

Gaza is currently living through its worst power shortage in memory as the supply of fuel smuggled from Egypt dwindled, forcing the closure of the coastal territory’s sole power plant.