The High Court of Justice has ordered the state to review its decision to cut the fuel companies' marketing margin. Minister of Finance Yuval Steinitz and Minister of National Infrastructures Uzi Landau ordered the cut of NIS 0.19 per liter on August 31 on the advice of the ministries' joint fuel prices committee.
Judges Elyakim Rubistein, Uzi Vogelman, and Salim Joubran heard the petition filed by the fuel companies against the directive. The petition was filed by Delek Israel Fuel Corporation Ltd. (TASE: DLKIS), Paz Oil Company Ltd. (TASE:PZOL), Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL), and Sonol Israel Ltd.
The High Court's ruling is a blow to Steinitz, who pressured Landau to sign the directive. Landau argued against a sharp reduction in the fuel marketing margin and urged a gradual reduction, to which Steinitz replied, "No one has the moral right to charge the public more than what the expert committee decides is good for the fuel companies."
The Ministry of National Infrastructures raised the price of gasoline for September by NIS 0.25 per liter, completely offsetting the reduction in the fuel marketing margin.
The prices committee has one month to review its decision, because of factual errors that underpinned the original decision to cut the marking margin. The committee will also have to summon the fuel companies to another hearing before announcing its decision.
The High Court of Justice kept in force the directive cutting the fuel marketing margin until a new decision is announced, so the price of gasoline will remain unchanged for now.
The Ministry of Finance said in response, "The High Court of Justice today decided not to change the decision by the joint prices committee… to reduce the fuel companies' marketing margin… However, the court asked the fuel companies to provide the prices committee and the Ministry of National Infrastructures with detailed up-to-date figures that are satisfactory to the ministry, after the state tried to obtain these data for a long time without cooperation by the companies. The court also asked the prices committee to review the data received over a three-month period."
The Ministry of National Infrastructures said, "Today's hearing on the fuel companies' petition against the reduction in the marketing margin, the High Court of Justice dismissed the companies' petition for an interim injunction against the directive to cut the margin, due to the absence of cooperation by the companies in sending the data needed to establish the basis for the decision, especially financial data since 2007. Therefore, during the hearing, the state agreed, subject to the transfer of up-to-date data by the companies, to review the data and make a decision accordingly."
Published by Globes [online], Israel business news - www.globes-online.com - on September 20, 2011
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