GAZA FOOD AND FUEL: MORE DIESEL THROUGH THE TUNNELS

UNCLAS JERUSALEM 001849

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TAGS: PHUM ECON EAID PTER KTFN KWBG IS
SUBJECT: GAZA FOOD AND FUEL: MORE DIESEL THROUGH THE TUNNELS


1. (SBU) Summary. Gaza-based contacts report that shipments
of humanitarian and commercial goods into Gaza from Israel
were slightly higher in September compared to previous
periods. Fuel imports remain restricted, encouraging
smuggling of diesel from Egypt. Gaza sources and press
reports note that increased supplies of diesel in Gaza have
pushed prices down to near Israeli levels. End Summary.

Food imports
--------------


2. (SBU) Gaza-based UN contacts report that an average of 350
truckloads/week has entered Gaza via Kerem Shalom and/or Sufa
crossings since the first of September, a slightly higher
rate compared to the previous period: July and August
shipments averaged approximately 325 truckloads/week. (In
addition, approximately 250 truckloads/week of animal feed
and grains enter Gaza via the Karni conveyor belt.) The
majority of shipments into Gaza remain commercial food and
merchandise. WHO contacts report that most families in Gaza
have enough food to survive, but the inability to provide
recommended nutrient levels will likely have negative
long-term effects on the health of many of Gaza's children.
(Note: The UN continues to use May 2007 import figures --when
imports averaged 3,094 truckloads/week-- as a "baseline" for
Gaza's requirements. End Note.)

Imports of fuel from Israel remain steady
--------------


3. (SBU) PA and UN contacts report that fuel imports from
Israel meet 25-40 percent of Gaza's demand and note that
import totals have remained level for the past few months.
The PA Gaza Fuel Agency director reported to EconOff on
October 3 the following fuel import amounts through Nahal Oz:
- Diesel - 1.2 million liters/week
- Gasoline (Benzene) - 120,000 liters/week
- Cooking gas - 1,000 tons
- Industrial Diesel (for the Gaza Power Plant) - 2.5 million
liters/week


4. (SBU) The manager of the Gaza Power Plant said on October
3 that the plant continues to average 60 MW output, which is
roughly 35 percent of Gaza's total power supply. Israeli
feeder lines provide 115 MW, and 17 MW comes from the
Egyptian grid.

Smuggled fuel from Egypt increases
--------------


5. (SBU) PA contacts report that an increasing amount of
diesel fuel is being pumped into Gaza via the tunnels from
Egypt and sold on the black market. Local press reports
state that, as a result of improved fuel pump systems in the
tunnels, the price of smuggled diesel fuel has dropped 65
percent in recent weeks and now nearly matches prices in
Israel. (Note: We understand the quality of the smuggled
diesel, however, to be much worse. End Note.) The Vice
Chairman of the Gaza Gas Station Owners Association told
Economic Specialist on October 3 that Gazans have asked
tunnel operators to bring gasoline in through the tunnels,
but the operators are hesitant due to its highly combustible
quality.

Eid demands on the tunnels: Chocolate and Sheep
-------------- --


6. (SBU) Gaza contacts also privately comment that the tunnel
operators are highly responsive to local demand. As an
example, they shipped increased quantities of chocolate in
advance of the Eid holiday. Sheep are also being smuggled
in. One contact noted the ease in which sheep come through
the tunnels: "All you have to do is get the first one
through, and the rest follow."
WALLES