Paralysis of Movement: From Shekel to Fuel

Before leaving home in the morning, a citizen in the West Bank now needs to consult more than one source of information: which checkpoints are open today, which gas stations still have gasoline, and when half their salary will be paid. This is an accurate description of a recurring reality over the past weeks: queues in front of stations, stations closed after running out of supplies, and a parallel shortage of cooking gas affecting almost every home. The most important question is not just "when will the crisis end," but rather: are we facing a new challenge, or a new manifestation of a chronic economic illness?

Before the gasoline crisis dominated summer headlines, a similar crisis hit a parallel sector: in January 2026, the West Bank experienced a severe cooking gas crisis, due to cold weather increasing consumption, a decline in Israeli supply, and a rush by citizens driven by panic and expectations of a regional war. This means that the current crisis is a second episode in a recurring pattern: a sudden shortage, panic exacerbating it, official reassurances, without radical treatment to prevent its recurrence.

The latest crisis coincided with widespread regional unrest against the backdrop of the US-Israeli escalation against Iran, which affected global energy markets. Palestinian authorities attributed the shortage to intertwined factors: reduced incoming quantities, Israeli restrictions, shekel accumulation, and increased demand as citizens rushed to hoard, a consumer panic that exacerbated the crisis. The General Petroleum Authority later announced the resumption of supply at a rate of about three million liters per day.

Immediate causes alone do not explain the recurrence of this pattern. The sector suffers from known structural fragility: almost complete dependence on Israel as a sole source, making the market vulnerable to any political decision or logistical disruption. More dangerously, a law issued in 2023 mandates the establishment of a national strategic reserve, but this text has not been practically translated into an actual reserve.

Here arises a preliminary question that should have been settled before any other discussion: what is the actual daily need of the Palestinian market, and how much actually reaches it? Between a research estimate of a daily need of about 4 million liters, and an official statement about a "normal" supply rate of 3 million liters, then a temporary one-day drop to one million liters due to a traffic accident, figures vary from one source to another without a clear baseline. Even stranger, media outlets documented that the Authority itself refused to publicly state its name regarding the accuracy of the 3 million figure, while "field facts deny it" according to their expression. So, is the gap a real deficit? Or is part of it filled by smuggling, the extent of which is not even agreed upon? Even specialists are divided: some link the crisis to the accumulation of the shekel, while others reject this link, arguing that the liquidity crisis has existed for years without previously disrupting the sector. When experts cannot agree on a single diagnosis, the real question becomes: where is the official institution capable of controlling these figures and publishing them transparently?

Many believe that the Paris Protocol (1994) prohibits the import of fuels from non-Israeli sources, which is inaccurate. The agreement in principle allows the import of gasoline from Egypt, for example, provided it meets specific technical specifications. The practical problem has three obstacles: specifications set according to Israel's geographical conditions, giving it discretionary authority over accepting any alternative shipment; the passage of imports through crossings operationally controlled by Israel; and the absence of Palestinian infrastructure, specifically tanks capable of receiving shipments directly from Egypt or Jordan.

In other words, the legal margin for diversification exists, albeit limited, but it has not been utilized due to the lack of investment in storage, not due to an absolute prohibitive text. The cost of relying on a single source is estimated at a fuel bill of nearly one billion dollars annually, which could have been reduced if this margin had been exploited. The recommendation, therefore, is not to renegotiate the agreement, but to make serious investment in infrastructure.

Here lies an important point, although it is a matter of dispute among specialists: the fuel trade is originally linked to the clearing system and the Paris Protocol, and the treasury bears a significant cost from pricing and subsidy mechanisms; the International Monetary Fund estimated the cost of untargeted fuel subsidies at about 0.9% of GDP for 2023 alone. With the retention of clearing funds, the government's ability to finance its obligations theoretically becomes more fragile. However, some specialists reject this direct link to the current crisis specifically, arguing that the shekel crisis has existed for years without previously disrupting the sector, and that gas stations are able to purchase in cash when needed.

The government approved the establishment of a state-owned fuel company to handle purchasing, storage, and transport, with the Authority's role focusing on regulation and oversight. Supporters see it as a necessary regulatory step, while critics warn that separating tasks without addressing the root cause may add bureaucracy instead of solving the crisis. The critical question here is: will this separation restore efficiency, or will it transfer debt from one entity to another without resolving it? Added to this is the spread of informal trade and smuggling, which expands whenever official supply channels are disrupted.

Likewise, the government made a communication error more than a policy substance error: although the idea of the company had been discussed for months, the announcement of its approval amidst the crisis suggested to public opinion that it was the anticipated "solution," while it has no direct relation to the immediate bottleneck. It would have been more appropriate to direct public discourse towards activating the strategic reserve, as the actual solution.

What we are witnessing is not an independent challenge, but another manifestation of a single structural fragility that recurs in different sectors: energy today, liquidity yesterday, and clearing funds before that. The common denominator is the Palestinian economy's dependence on decisions and resources it does not control, in the absence of reserve tools capable of absorbing the shock before it turns into a livelihood crisis.

Summary: Four Measurable Steps

First, a periodic and transparent announcement of needs, supplied quantities, and available stock, on a consistent weekly basis, not just general reassurances during crises.

Second, a clear timeline and funding for the establishment of strategic reserve tanks, with a capacity to accommodate shipments from alternative sources such as Egypt or Jordan.

Third, defining the powers of the state-owned company, its ownership structure, its oversight mechanism, and how to deal with existing debts.

Fourth, a clear emergency plan for distribution in case of any shortage, prioritizing hospitals, public transport, bakeries, and productive sectors.

As long as these steps remain on paper, the fuel crisis will remain prone to recurrence with any new regional tension, regardless of any administrative reform, however modern it may seem.