Has Minister of Transport Shaul Mofaz capitulated to the ports workers yet again? Mofaz has now delayed signing the order reducing tariffs on fuel imports to Israel for several weeks.
Mofaz's procrastination over the signing of the order has left ministers bewildered, given that over the past year the Ministry of Transport has moved forward with a reform that will see a cut in pier fees for imports of fuel via the Haifa and Ashdod ports. Minister of Transport director general Gideon Siterman even asked the Ministry of Finance repeatedly to allow the cuts to go into effect.
The reform in fuel import tariffs is a milestone event for the fuel sector, with pier fees charged by ports for importing crude oil and energy products due to be slashed by 60-70%. The reform has set a pier fee of $1.5 per ton irrespective of the type and price of fuel imported. It is intended to put an end to the existing disparity under which most fuel imports are brought into Israel through the Eilat-Ashkelon Pipeline Co. (EAPC) terminal.
Two months ago, after protracted wrangling, the joint Ministry of Finance-Ministry of Transport pricing committee approved the reduction in pier fees and forwarded its recommendation to both ministers for their approval.
The new regulations require the signatures of Minister of Finance Ronnie Bar-On and the Minister of Transport but Mofaz has yet to put his signature to the new directive, which will only be forwarded on to Bar-On after he has done so.
Government sources believe that Mofaz is stalling because of the opposition by Haifa Port Company Ltd. and Ashdod Port Company Ltd. to the move, which could shave tens of millions of shekels off their income every year. Haifa is likely the harder hit of the two ports, since it handles one millions tons of refined product imports a year.
This is not the first time that the Ministry of Transport has shown a lack of consistency in its handling of the ports. "Globes" recently reported that Ministry had gone back on its commitment to support the introduction landlord model, as part of the reform of the ports.
Published by Globes [online], Israel business news - www.globes-online.com - on September 11, 2008
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