West Bank fuel supply hit after Israeli cutoff

Ramallah (West Bank), May 10: Petrol stations in the West Bank are running out of fuel after their Israeli supplier cut off deliveries over the Palestinian government's failure to pay bills, a Palestinian official today said.

Mujahed Salameh, director general of the Palestinian Petroleum Agency, said the government does not hold fuel reserves. He estimated that supplies of petrol and cooking gas would run out within 24 hours.

The few West Bank petrol stations that still had fuel were rationing it, selling a maximum of 100 shekels' worth of gasoline per car. Motorists roamed streets in search of fuel, and about 100 cars lined up at one station near Ramallah.

The fuel shortage, caused by a cash liquidity crunch, threatened to worsen an economic crisis that began when Western countries froze aid and cut most diplomatic ties after the Islamic militant group Hamas came to power in March.

''There will be an economic catastrophe. Many factories, bakeries and transport will stop working,'' Salameh said.

He said Israel's Dor Alon , the sole supplier of gasoline and cooking gas to the Palestinian Authority, had cut supplies over an outstanding 120 million shekel bill. Dor Alon had no immediate comment.

Suheil Jaber, a petrol station owner in Ramallah, said: ''I only have 96 (octane) petrol. It will be gone in two hours.'' Petrol remained available in the impoverished Gaza Strip, where some taxi drivers had earlier reported they were illegally running their cars off cooking gas to avoid the high cost of gasoline.

Mechanics said hundreds of cars have been converted.

In Ramallah, taxi driver Hussein Muqbel said he could keep his car working only for one more day unless he found petrol soon: ''After that, I will pull over, switch off the engine and sit at home. How shall I feed the family?'' ECONOMIC MELTDOWN The United States and European Union cut direct aid to the Palestinian government to try to force Hamas to recognise the Jewish state and abide by interim peace deals with Israel.

Hamas, winner of a January parliamentary election, is formally sworn to destroy Israel although it has largely abided by a truce for over a year.

The Palestinian government also has been unable to receive other funds from abroad because banks fear sanctions by Washington. As a result, the Palestinian Authority has been unable to pay salaries to 165,000 public workers since March.

The economic sanctions have prompted concerns of a possible humanitarian crisis, and moderate President Mahmoud Abbas has warned of instability unless aid flows resume.

The ''Quartet'' of Middle East peace brokers agreed on Tuesday on a new way to get aid to Palestinians after Washington caved to pressure to allow a ''temporary international mechanism'' for aid to avoid financial collapse of the Palestinian Authority.

Israel has also withheld tax and customs revenue worth 55 million dollars a month that it collects on behalf of the Palestinian Authority. Salameh said the Palestinian Authority used to pay Dor Alon 40 per cent of the tax revenues.

Israeli officials had said power and food supplies to the Palestinians would continue despite the tax cut-off.

Salameh said total debt to Dor Alon had reached 400 million shekels, built up in recent years, but that he expected the firm to resume supplying fuel if the cash-strapped Palestinian Authority paid 120 million shekels off the total bill.

REUTERS

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