"Each extra $10 per barrel of crude oil in the world costs the Israeli economy $800 million a year," Israel Institute of Petroleum and Energy chairman Amir Makov said last night. He made the comment at the institute's reception to mark Minister of National Infrastructures Eliezer Sandberg's taking up his post.
Makov told Sandberg that Israel would pay over $5 billion for energy inputs in 2005, if oil prices stay at their present level, compared with a projected $4.5 billion in 2004, $3.7 billion in 2003 and $3 billion in 2002.
Makov said spending 5% of GDP on energy inputs would have far-reaching consequences for the Israeli economy, and the Ministry of National Infrastructures should therefore act energetically to lower energy costs by expediting a switch to natural gas to produce electricity for industry, improve energy efficiency, and encourage the use of alternative energy sources, especially solar energy.
Sandberg replied, "I have reasons for optimism that the penetration of natural gas in the economy will go as planned. If that turns out to be the case, the bleak forecasts about higher energy prices in Israel in the coming years will be disproved."
Commenting on the frequent replacement of infrastructure ministers in recent years, Sandberg said, "I hope that we won't have convene again next year to mark the entry of a new minister." Sandberg took over the infrastructures portfolio three months ago, replacing Joseph Paritzky, who had resigned.
Published by Globes [online] - www.globes.co.il - on November 4, 2004