Ben-Eliezer introduces new gas reforms bill

New bill aims to increase competition in local gas market, reduce prices.

By MATTHEW KRIEGER
November 20, 2007 08:17
2 minute read.
binyamin ben eliezer 88 224

ben eliezer 224.88 . (photo credit: Ariel Jerozolimski)

 
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In a tense meeting of the Knesset Economic Affairs Committee on Monday, National Infrastructures Minister Binyamin Ben-Eliezer introduced a bill of reforms that calls for an overhaul of the household gas sector. The reforms bill was constructed by a joint team of representatives from the Infrastructures and Finance ministries. "This bill was put together to introduce more competition into the home-gas market and we believe that it will allow the country's smaller gas companies to gain more of a market share and it will lower the prices for customers," Ben- Eliezer said at the committee meeting. "These reforms will make a big difference for the weakest population, all of whom are faced with having to pay increased prices for gas." The reforms are primarily aimed at easing the process by which consumers can switch gas suppliers as well as restricting the largest companies from infringing on the customer base of smaller companies. According to Infrastructure Ministry's numbers, although there are some 33 companies that supply gas to consumers, 92 percent of the market is dominated by only four companies - Isragas, Amisragas, Supergas and Pazgas. The smaller companies have only been successful in penetrating the balloon-supplied gas market, as 80% of sales of gas balloons have come from the smaller enterprises. Sales of gas balloons, however, only account for 30% of the overall home-gas market, while 70% of gas sales are from pipeline supplied gas. Should the reforms bill be passed into law by the Knesset, it will be illegal for companies to target customers of other gas companies for at least the first six months after a customer has signed a new contract. Customers in newly constructed apartment buildings will have their choice of gas supplier, as opposed to today when companies sign agreements with the building contractor to supply every tenant with gas. Consumers will also not be obligated to sign year-long contracts requiring them to stay with one supplier. "Once this passes into law, the gas market here will improve significantly for both consumers and smaller suppliers," the Infrastructures Ministry said. Representatives from the country's smaller gas companies hailed the bill as "long overdue." "This bill is excellent for us - it is wonderful and it will allow us to really be able to compete against the larger gas companies such as Amisragas and Isragas, something until now we have not been able to do," Ori Ganay, marketing manager of Jerusalem-based Gaz-Yagel Ltd., told The Jerusalem Post. The Public Trust organization also welcomed the reforms but added that in order to introduce more transparency into the market, the new law must require gas companies to clearly publish their prices as well as any additional tariffs. The largest gas companies, led by Amisragas, criticized the reforms, saying that they will damage the local gas market and lower the level of service received by customers. The Economic Affairs Committee will reconvene next Monday to further discuss the reforms.

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