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Tuesday, October 03, 2006

Who is going to give the 'Palestinian Authority' a better deal?

For the last twelve years, the Israeli Alon Oil Company has been supplying the 'Palestinian Authority' with gasoline and other petroleum products. But on Monday, the company announced that effective from 2007, it will no longer be the 'Palestinian Authority's' exclusive supplier. The PA has cut off the contract, because Alon would not give it 'flexible' payment terms. Unless Israel suddenly allows the PA to import from Jordan, I don't know who they think is going to give them a better deal. Certainly it won't be any of the other Israeli companies (Sonol, Paz and Delek), all of which are larger than Alon. The 'Palestinian Authority' is not exactly a good credit....
Due to the PA's grave economic situation, it has encountered difficulties in paying its debts to the energy company. Since Hamas' ascendance to power and the economic crisis that followed, the Israeli company had ceased gas supply to the PA on three separate occasions, due to standing debts amounting to hundreds of millions of shekels. However, the supply had been renewed several days later, after various international entities, including the European Union, agreed to assist the PA and cover its arrears.

According to Alon's statement, the PA has recently approached the company and asked to improve the existing trade treaties between them. Alon's rejection of the offered terms resulted in the PA's decision to end transactions with the company.

It appears that the PA has asked Alon to allow more flexibility in payments and to lower gas prices.
Let me guess: the EU is going to try to force one of the Israeli companies to sell to the PA? The PA will create yet another 'humanitarian crisis' because they have no gasoline for their (stolen) cars? The EU will try to force Israel to allow the 'Palestinian Authority' to import gasoline from Jordan if they can convince the Jordanians to give them a better price? Stay tuned....


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