The Ministry of National Infrastructures plans to cap the astronomical rent received by some fuel station owners in high demand areas. The prices committee for setting the new sales spread for fuel companies will submit its recommendations to Minister of National Infrastructures Uzi Landau tomorrow. Sources inform ''Globes'' that the committee recommends capping the amount that the fuel companies receive for their expenditure on long-term leases to NIS 0.16 per liter.
The committee explains the measure by the "extreme unreasonableness" of some fuel station leases. Rents that the companies pay to the fuel stations' owners reached new heights two years ago during the war between the companies for fuel stations. An example is the Liebster fuel station adjacent to the Seven Stars Mall in Herzliya, which Delek Israel Fuel Corporation Ltd. (TASE: DLKIS) and Sonol Israel Ltd. fought over two years ago.
Fuel market sources say that fuel station owners receive about NIS 500,000 a year in rent from Sonol.
Fuel companies include the full cost of their rent as part of the general sales spread, which reaches NIS 0.70 per liter. If the committee's recommendation is accepted, a rental item will be included in the sales spread that will compel the fuel companies to absorb the extra costs.
The committee also proposes limiting the discount for large vehicle fleets. These discounts mean that individual consumers who are not members of large organizations subsidize large consumers, such as the Ministry of Defense, Israel Police, Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), Israel Electric Corporation (IEC) (TASE: ELEC.B22), and high-tech companies. The committee proposes capping the price that fuel companies can charge occasional customers to not more than NIS 0.15 per liter above the average price of fuel sold to large vehicle fleets.
Published by Globes [online], Israel business news - www.globes-online.com - on August 28, 2011
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