Fuel taxes bring Gaza’s sole power plant to standstill

The Gaza Strip’s Energy Ministry announced late Monday that the strip’s only power plant had stopped working due to fuel taxes imposed by the Palestinian unity government.

In late March, the Palestinian unity government – based in the West Bank city of Ramallah – exempted the power plant, which is used to generate electricity, from paying fuel taxes.

However, the unity government has since re-imposed taxes on the plant’s fuel purchases, which, according to Gaza’s Energy Ministry, the cash-strapped strip can ill afford.

The new fuel tax is 3 Israeli shekels (roughly $0.8) per liter of fuel, meaning total monthly taxes to be paid by the plant now stand at some 40 million shekels (roughly $10.4 million), according to Loaai Hanash, director of customs and taxes at the Palestinian Finance Ministry.

For the last eight years, the Gaza Strip and its roughly 1.8 million inhabitants have groaned under a chronic lack of power.

Gaza’s power shortfall has been caused primarily by an ongoing embargo of the coastal enclave – by air, land and sea – imposed by Israel and Egypt, both of which share borders with the embattled strip.

Gaza’s power shortage has been further aggravated by three devastating Israeli military offensives against the strip (in 2008/09, 2012 and 2014), which – along with killing thousands of Palestinians – destroyed vast swathes of Gaza’s civilian infrastructure.