Oil Refineries Ltd. has warned of a severe shortage of oil and petroleum products from Sunday, following the decision by Eilat-Ashkelon Pipeline Co. (EAPC) to suspend the supply of crude oil to Oil Refineries Haifa.
Oil Refineries chairman Ohad Marani and general manager Yashar Ben-Mordechai are due to hold an urgent meeting today with EAPC president Oren Shachor and general manager Yair Waideh. Ministry of National Infrastructures director general Eli Ronen will also attend the meeting, which will aim to reach agreement on tariffs for the supply of crude oil by EAPC to Haifa Oil Refineries.
EAPC stopped the pumping of crude oil to Haifa Oil Refineries claiming it had not paid a debt of more than $1 million for the unloading of oil at Haifa Port and pumping it to the refinery. The two sides are also in dispute over the tariffs EAPC will charge once Haifa Oil Refineries has been privatized. Oil Refineries is demanding that pumping charges should be the same as those charged to Oil Refineries Ashdod.
The Government Companies Authority and Ministry of Finance Accountant General have asked Shachor to set the tariffs for the pumping of oil to both oil refineries on the basis of the marginal cost price of pumping to each of them. Shachor claims that the tariffs differed since electricity costs for maintaining the Haifa line were substantially higher than those for the Ashdod line. The refusal by EAPC to set a uniform tariff for supply to both ports led Oil Refineries to stop payment for unloading and pumping services. Waideh said this in turn led EAPC to suspend pumping of petroleum, after attempts to resolve the issue failed.
Marani confirmed to “Globes” that shortages could be expected from Sunday. He insisted that EAPC’s decision to set a tariff of their own, especially one that was discriminative, was unacceptable.
Published by Globes [online], Israel business news - www.globes.co.il - on May 11, 2006
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