Alon Oil gas station
PA to stop buying petrol from Alon Oil
Palestinian Authority announces it would stop purchasing petrol from Alon Oil Company from 2007. Sales to Palestinian Authority comprise third of company’s sales
The Israeli Alon Oil Company, the Palestinian Authority's sole provider of gas, has announced Monday it would cease providing petrol to the Palestinians from 2007.
According to a statement sent by the company to the stock exchange, the PA has informed the Alon Oil Company that it wishes to end the contract with it. Alon is responsible for the entire official gas supply to the PA. the sales to the Palestinians account for a third of Alon's revenues, and the recent decision is expected to deal a severe financial blow to the company.
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.
