Firefighters put out a fire near the fuel tanks in Gaza's sole power station on January 15, 2015
Firefighters put out a fire near the fuel tanks in Gaza's sole power station on January 15, 2015 © Mohammed Abed - AFP/File
Firefighters put out a fire near the fuel tanks in Gaza's sole power station on January 15, 2015
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AFP
Last updated: July 21, 2015

Gaza's sole power plant shuts over Palestinian tax dispute

The Gaza Strip's sole power plant has halted production, the Hamas-run energy authority said Tuesday, in the latest dispute with the West Bank-based Palestinian Authority over fuel tax.

Relations between Islamist movement Hamas and the PA, which is dominated by bitter rivals Fatah, are at rock bottom despite an April 2014 agreement that installed a unity government and was meant to centralise administration of the Palestinian territories.

While the Palestinians fail to patch up their differences, the PA runs the West Bank and Hamas remains in control of Gaza, which faces its worst humanitarian crisis ever after a bloody and destructive war with Israel in July-August 2014.

"The levying of fuel taxes by the finance ministry in Ramallah is preventing the (Hamas) energy authority from running the power station," a statement from the authority said.

The PA must "lift all taxes on fuel" to get the plant up and running, it said.

Hamas pays the PA for fuel imported to besieged Gaza, but is short of cash and had been unable to cover the additional costs in tax.

In December, Qatar stepped in and donated $10 million (nine million euros) to the PA to cover the tax, effectively exempting Hamas from paying it.

But that money has dried up, and the PA is insisting Hamas begin paying the tax again, the Islamist movement says.

Hamas shut the power plant in March over the same dispute.

Even with the plant running, Gaza suffers 12 hours of power outages each day.

Many homes have their own generators, and households can purchase, expensively, fuel that comes into Gaza for private consumption.

But many areas of Gaza are totally dependent on the plant for energy.

Last summer's war between Israel and Hamas killed 2,200 Palestinians and 73 people on the Israeli side.

It left 100,000 Gazans homeless and a year on, reconstruction has barely begun.

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