Deputy Minister of Finance in the Palestinian Authority Dr. Samir Abu
Eisha said on Thursday that the Ministry has signed a contract with Paz
company, the largest fuel company in Israel, which signals an end to
the fuel crisis in the Palestinian Authority areas.

The PA had ceased a 12-year-old contract with another Israeli company, Alon Dor which was the sole provider for fuel to the Palestinian areas.  The cease will be in effect by the beginning of 2007, where as the contract with Paz will start.

A dispute erupted in the past few days between the PA and Alon Dor resulted in the latest to stop providing the Palestinian areas with fuel.

The contract with Paz has better conditions than the one with Alon Dor, including prices and payments arrangements, Abu Eisha told a press conference in Ramallah.

Alon Dor has stopped the fuel flow to the PA three times since March because of payment delays.

The new contract, which took few months of negotiations to agree one, includes a decrease in charges imposed by the Israeli exporter estimated to be around 27 – 41 percent on Gas, 22 – 30 on fuel for Diesel engines and 27 – 34 on Kerosene.

Abu Eisha said, “total direct savings will be around NIS 75 million per year” including savings on Bank charges and infrastructure costs.

The new contract allows the Palestinian Authority to import crude oil from outside Israel and refine it in Paz’s refinery in Ashdod’s harbor. This opens the chance for the PA to import oil from some Arab countries, which may lower the retail prices.

In addition, the contract obliges Paz to help the Palestinian authority to create a reserve by collecting the fuel in tanks in the Palestinian areas.

According to Abu Eisha, Paz has already started building the infrastructure for the oil reserve in Palestine, and it will be ready within one and half months.

The deputy Minister said that “despite of meetings with their representatives, Alon Dor insisted that it will not resume providing oil until all debts are paid,” adding that “the debts are equal to NIS 142 million, we paid 70 millions and today we will transfer another 20 million, whereas the rest will be paid by the end of this week.”