GAZA - Gaza's lone power plant shut its generators on Friday due to a fuel shortage, a move that will likely increase already long blackout hours in the impoverished coastal territory run by the Islamist Hamas group.

Chairman of the Gaza Energy Authority Fathy Asheik-Khalil said the plant, which serves almost half of Gaza's 1.8 million people, went offline after fuel became too scarce.

Gaza residents have endured around eight hours of daily blackouts in recent years because of fuel shortages. The Gaza Energy Authority said the power plant's closure means Palestinians could suffer 12 hours of daily blackouts.

The fuel supply steadily decreased after Egypt in June stepped up a campaign to demolish smuggling tunnels along its border with the enclave which were a major import conduit.

The Western-backed Palestinian Authority, which exercises partial rule in the West Bank, pledged last week to deliver fuel to Gaza without a usual tax, allowing the rival Hamas government to buy 400,000 liters of fuel a day.

But the Authority cancelled its offer of a tax exemption, Khalil said in a statement, making it difficult for the Gaza authorities to afford the fuel. The Authority did no elaborate on why it decided to reimpose the tax.

In addition to the power plant, which produces up to 65 megawatts, Israel feeds the strip with 120 megawatts and Egypt pours in 27 megawatts. The Palestinian Authority says it pays Egypt and Israel for their inputs.

Fuel prices have climbed as Palestinians resorted to buying Israeli-imported petrol at double the price, making it more difficult for residents to operate generators they use to power their homes during the cuts.

Last week, the Coordinator of Government Activities in the Territories Maj.-Gen. Eitan Dangot ordered the transfer of 600,000 liters of fuel to Gaza, following a request by Palestinian Authority President Mahmoud Abbas.

JPost.com staff contributed to this report.

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