Delek Israel Fuel Corporation Ltd. (TASE: DLKIS), the domestic fuel arm of Yitzhak Tshuva-controlled Delek Group Ltd. (TASE: DLEKG), has fired 200 gas station attendants in the past two weeks in response to the directive cutting the fuel marketing margin by 25% to NIS 0.70 per liter, which lowers the companies' profit to NIS 0.54 per liter. No additional layoffs are expected.
Minister of Finance Yuval Steinitz and Minister of National Infrastructures Uzi Landau signed the directive in an effort to lower the price of gasoline. In arguing against the directive, Delek Israel said that it would cause tens of millions of shekels in losses.
Following the firings, Delek Israel switched full-service points at gas stations to self service or shut them down entirely. Sources at the company said that the firings were necessary to prevent heavy losses. They said that Delek Israel and the other fuel companies finance employees' salaries and gas stations' overheads from the marketing margin.
Delek Israel said in response, "The sharp cut in the marketing margin, which caused material harm to the company's results, forced the company to act in a range of areas to reduce the effect of this damage, including reducing its workforce and switching full-service stations to self service. The company has completed the measure in personnel."
Earlier this week, Sonol Israel Ltd. announced that it will fire 300 employees for the same reason.
Published by Globes [online], Israel business news - www.globes-online.com - on October 6, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011