Dor Alon on Sunday confirmed that it had stopped fuel shipments to the Palestinan Authority for non-payment but a senior PA official denied reports in the Hebrew press suggesting that a check payable to the fuel company was intentionally bounced in retaliation for Israel's decision to stop the transfer of tax revenues.
"It was a technical mishap blown way out of proportion by the media because of the sensitive political situation," said PA Deputy Finance Minister Jihad Al-Wazir.
Due to cash-flow problems caused by Israel's tax revenue embargo following the Hamas electoral victory, Al-Wazir said the PA had sent a letter to Dor Alon requesting that the company delay depositing the NIS 103 million check. Apparently, he said, the letter did not arrive in time, and the check bounced on Friday, leading Dor Alon to announce a halt in fuel supplies to the PA until the debt was settled.
"Without certainty in payments, the supply will not be renewed," Dor Alon told the Tel Aviv Stock Exchange Sunday, adding that "if the supply of fuel [to the PA] will be stopped permanently, this could have a negative effect on [Dor Alon's] profitability."
After the government's decision to stop tax transfers to the PA, Dor Alon said it had requested instructions on how to continue supplying the PA, but did not receive a response.
According Al Wazir, every 10 days, the PA regularly sends a check for roughly NIS 100m. to Dor Alon - the sole supplier of gas to the Palestinians.
"There is no slack time in this system, so even a minimal mishap can have a significant effect," Al-Wazir commented.
Al-Wazir noted that the PA was in contact with Dor Alon CEO and President David Wiessman, currently in the US on business, and that the issue had been resolved. Dor Alon can now deposit the check successfully, he said.
Wiessman confirmed to The Jerusalem Post late Sunday that the matter had been settled and that the check would be redeposited. He expected supplies would be renewed "within a day or two."
Al Wazir explained that the PA was dependent on internal tax revenues, following the freeze of NIS 312m. in customs and taxes that Israel was to have transferred for February, and pledged that the PA would "do its best" to make payments to other Israeli suppliers of goods and services, including Israel Electric Company, the Mekorot water company and hospitals.
"Stopping the transfer of tax revenues has hurt us, but as the PA we honor our commitments and will continue to honor our commitments," Al-Wazir said, adding that the PA did not want to let such mishaps undermine its credit.
The Israeli government also rejected reports in the Hebrew press that indicated the government would consider applying the frozen funds to the debt owed by the Palestinians to Dor Alon.
"At issue is a commercial debt between a private company and the Palestinian Authority. The State of Israel and the government of Israel have no interest in a contract with the companies," the Prime Minister's Office said.
Dor Alon shares closed down 2.9% at NIS 47.56 in Sunday trade on the Tel Aviv Stock Exchange.