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Temporary solution reached for Gaza electricity crisis amid tax dispute

April 28, 2016 12:04 P.M. (Updated: April 28, 2016 1:14 P.M.)
GAZA (Ma’an) -- Palestinian officials announced Wednesday the Gaza Strip will be exempted from paying fuel tax this summer, marking temporary resolution to ongoing tax disputes that have deepened an electricity crisis in the besieged enclave.

Palestinian official Jamil Mizhir told Ma’an that several meetings were held with Palestinian Minister of Labor Mamoun Abu Shahla before the Palestinian leadership decided that Gaza would receive exemption from the 80 to 100 percent of the fuel tax starting May 1 until the end of the summer.

Mizhir said the exemption was not a permanent solution, but would guarantee Gaza eight hours of electricity per day from the besieged strip’s sole power plant.

The Gaza Strip was left almost entirely without power during a number of days over the past month due to maintenance work on power lines from both Israel and Egypt as well as the ongoing tax disputes on fuel for the enclave’s near-defunct power station.

The dispute falls between Gaza’s electricity company and the West Bank-based Palestinian Authority Ministry of Finance over taxes on fuel used by the station.

Muhammad Thabit, a spokesman for Gaza’s electricity company, told Ma’an last month that starting this year, the PA ministry had cut its subsidies for Gaza’s fuel costs by nearly 50 percent.

While Gaza's governing body Hamas is obligated to collect electricity bills from residents of the besieged enclave and send the funds to the PA, financial disputes have been ongoing since Hamas took over the Gaza Strip in 2007.

While the PA criticizes Hamas for failing to foot the bill, Hamas says Gaza’s residents are unable to pay bills due to high rates of unemployment and the crippling siege imposed by Israel and upheld by Egypt, Thabit said.

Hamas’ inability to cover these costs forced the power station to close for more than a month last year and led to condemnation of the PA by many of Gaza's residents.

The power plant -- alongside Egyptian and Israeli electricity grids -- fail to cover the territory's energy needs and has suffered from chronic shortages due to the near-decade long blockade.

War has also taken its toll, and during Israel's 50-day offensive on Gaza in 2014, the power plant was targeted, completely knocking it out of commission.
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