Tuesday, February 21, 2012

Hamas looking to profit from the Gaza blackout

Hamas looking to profit from the Gaza blackout

I have been trying to come up with an explanation for Hamas' deciding to allow the Gaza power plant to go dark rather than allowing fuel to come from Israel. A new article in Dar al Hayat may have given us a clue.
It's all about money.

Hamas decided to use smuggled fuel from Egypt instead of fuel from Israel because it was cheaper. The reason it was so much cheaper? Because Egypt subsidizes fuel for its citizens, and they were turning around and reselling the artificially low-priced fuel to Gaza!

Hamas is now using the crisis, with the specter of people in hospitals dying, to pressure Egypt to sell them fuel directly at the same subsidized prices.

Egypt, for its part, is refusing to sell fuel to Hamas below market value, noting that Hamas taxes fuel in Gaza at an astonishing 150%. Why should Egypt lose money while Hamas makes a windfall? At the same time, at a time of a fuel shortage in Egypt itself, the government cannot justify selling fuel to Hamas at low prices while its own people cannot find fuel themselves.

Meanwhile, pressure on Hamas from within Gaza is steadily increasing. A PFLP symposium on Saturday night harshly criticized Hamas' handling of the economy, including the fuel crisis, saying that there was a lack of transparency in Hamas' economic policies and that Hamas' taxes on the residents were onerous.