Shafir Engineering May Secure Ashdod Refinery Control Amid Divestment Conditions
Shafir Engineering could secure control of the Ashdod refinery if it divests certain activities to address market concentration concerns, as a newly formed professional team evaluates the move's impact on consumer welfare.
Shafir Engineering may be granted control permits for the Ashdod refinery, provided the company divests certain existing activities to mitigate market concentration concerns. Representatives of the Israel Competition Authority indicated this stance during a session of the Concentration Committee, which reevaluated whether to award the permit after an initial rejection in July.
A dedicated professional team comprising representatives from the Ministry of Energy, the Ministry of Finance, and the National Economic Council will examine the control permit through the lens of consumer welfare. This evaluation will assess whether the move benefits fuel and refined product consumers, potentially overriding systemic concentration concerns and enabling Ministry of Finance Director General Israel Malachi to reconsider his previous opposition.
During the prior committee vote, Malachi and Competition Authority Head Michal Cohen opposed the permit, while National Economic Council Chairman Avi Simhon supported it. The newly formed team's findings will be submitted to the Concentration Committee to determine if a formal rehearing is warranted.
Shafir currently holds a 10% stake in Paz Ashdod (Bazap) and maintains an agreement granting it exclusive control rights, precluding any other controlling shareholder. Summit, led by Zohar Levi and holding a 17% stake, strongly opposes the move, asserting readiness to inject capital independently. Meanwhile, the Ministry of Energy advocates for a strong controlling entity to safeguard the energy sector against potential crises, emphasizing the vital investments Shafir could bring to the refinery as broader industrial shifts take shape.
