The private Israeli firm that provides gasoline to the Palestinian Authority said a check for more than 22 million dollars bounced last week and announced it has stopped deliveries. "A check for 103 million shekels (22.4 million dollars) made out to Dor-Allon was returned unpaid last week and we have stopped deliveries because the Palestinian arrears are accumulating," a Dor-Allon spokesman told AFP Monday.Amid the threat of a fuel crisis in the Palestinian territories, an Israeli official questioned by AFP said the "government cannot intervene in a matter involving a private contract."
Since the 1994 creation of the Palestinian Authority, Dor-Allon has provided some 600,000 tonnes of fuel and 120,000 tonnes of gas per year to the Palestinian Energy Authority, which acts as the wholesaler in the territories. Sources at the energy authority said their arrears currently stand at about 120 million shekels (26.1 million dollars).
The Palestinian Authority is suffering from a severe cash crisis, which could be exacerbated following the victory of radical Islamist group Hamas in last month's general election. The United States and European Union have threatened to cut off aid unless Hamas renounces violence, recognizes Israel's right to exist and respects previously signed international agreement.
On Monday, however, EU external relations commissioner Benita Ferrero-Waldner said the European Commission had earmarked 120 million euros (142 million dollars) in much-needed funds for the Palestinians. The always cash-strapped Palestinian Authority is desperate for funds since Israel imposed sanctions on the incoming Hamas-led government, including a freeze on paying customs duties, worth around 50 million dollars a month.