GAZANS FACE COOKING GAS SHORTAGE, HIGH PRICES

C O N F I D E N T I A L SECTION 01 OF 02 JERUSALEM 002094

SIPDIS

NEA FOR FRONT OFFICE AND NEA/IPA; PRM FOR FRONT OFFICE AND
PRM/ANE; NSC FOR KUMAR; DEPT PLEASE PASS TO USAID FOR
ANE/MEA:MCCLOUD/BORODIN

E.O. 12958: DECL: 11/19/2014
TAGS: ECON ETRD EAID PREF IS GZ PTER
SUBJECT: GAZANS FACE COOKING GAS SHORTAGE, HIGH PRICES
HEADING INTO WINTER

REF: JERUSALEM 1705


1. (SBU) Summary: Humanitarian and commercial shipments from
Israel into Gaza in October continued at levels generally
consistent with previous months. However, a serious shortage
of cooking gas (used for heat and sterilization, as well as
food preparation) in recent weeks has led to the closure of
bakeries, and impacted the delivery of medical services.
USAID halted some humanitarian relief into Gaza for three
weeks due to interference by local authorities, but plans to
re-start shipments next week. End summary.

Crossings
--------------


2. (SBU) Kerem Shalom crossing (at the convergence of Israel,
Egypt, and Gaza) and the conveyor belt at Karni (on Gaza's
eastern border with Israel) remain the primary crossing
points for shipments from Israel into Gaza. According to the
UN Office of the Coordinator of Humanitarian Affairs (OCHA),
1,536 truckloads of supplies entered Gaza through Kerem
Shalom in October, compared with 1,426 truckloads in
September and 1,817 truckloads in August. OCHA considers
just over 20 percent of these shipments to be humanitarian.
In October, 597 truckloads of supplies passed via the Karni
conveyor, in comparison to 615 truckloads in September and
632 in August.


3. (SBU) The Nahal Oz fuel terminal (adjacent to Karni) was
the principal location for fuel transfers from Israel to Gaza
in October, but fuel shipments are increasingly being routed
through Kerem Shalom. Gaza-based fuel contacts report that
they understand the GOI intends to close Nahal Oz fuel
station entirely within two months. According to Oxfam
International, the new fuel station at Kerem Shalom provides
capacity to transfer both cooking gas and fuel oil for the
Gaza power plant, though the facility is reportedly less
efficient than Nahal Oz because of capacity, expense, and
distance from the plant and large population centers.


4. (SBU) While petrol and diesel pass though the crossings
for UNRWA's use, and occasionally for private consumption,
local consumer demand is almost entirely met via smuggled
fuel from Egypt. OCHA estimates that 100,000 liters of
petrol and 100,000 liters of diesel are transferred through
the tunnels daily.

Cooking Gas Shortages
--------------


5. (C) According to NGO sources, only 400 tons of cooking gas
(LPG) were transferred into Gaza during the first two weeks
of November, primarily through Kerem Shalom. The total
amount transferred for the month of October was 1,600 tons
(an estimated 23 percent of total demand). Press reports
have cited a shortage of cooking gas at hospitals -- where
fuel is required for sterilizing medical equipment -- as well
as small businesses, like bakeries. Prime Minister Salam
Fayyad told the Consul General on November 18 that he had
been inundated with calls about the gas shortage in recent
days. Demand for LPG goes up in cold weather, as the
canisters are also used to power small home heating units.


6. (C) Muhammad Khozendar, one of the largest fuel
distributors in Gaza, told EconOff on November 18 that the
current LPG crisis is a direct result of the GOI's decision
to shift the transfer of fuel from Nahal Oz to Kerem Shalom.
Khozendar called the decision "premature," and argued that
Kerem Shalom does not have the necessary capacity. He claims
Gaza requires about 300 tons of LPG per day (or approximately
10 truckloads at 30 tons/truck) during the winter months.
According to Khozendar, the Nahal Oz pipeline can fill 10
truckloads of LPG over an eight-hour period. In the same
period, Kerem Shalom's pipeline can only fill 2.5 trucks.


7. (C) Khozendar claims that as a result of the Gaza-wide
reductions of LPG, almost every bakery has closed, with only
three or four operating full-time, using diesel fuel. He
also said the lack of LPG is leading to a crisis among
chicken farmers, as 40 percent of Gaza's chicken population
has perished because of the lack of heat. As a result, the
price of chicken has increased from NIS 8/kilo to NIS
13/kilo.

Food
--------------

JERUSALEM 00002094 002 OF 002




8. (SBU) Food supplies make up the bulk of shipments into
Gaza from Israel, constituting 67 percent of the truckloads
in October. According to the UN, approximately 75 percent of
Gaza's population relies on food aid. The Food and
Agricultural Organization (FAO) and World Food Programme
(WFP) released a report on the Gaza Strip in November,
stating that the Gazan population is sustained at the most
basic or minimum humanitarian standard. According to the
report, 60 percent of households in Gaza are "food insecure,"
and an additional 16 percent are "vulnerable to food
insecurity." While food is available, widespread poverty in
Gaza is the principal cause behind the crisis -- the main
problem facing Gazans is affordability of basic items. The
NGO Mercy Corps, which distributes food aid in Gaza, has not
observed a change in the food situation for better or worse.


9. (SBU) The GOI is expected to allow 7,000 cows into Gaza
for the Eid al-Adha holiday at the end of November. Local
contacts report that 2,700 cows entered through Kerem Shalom
as of November 13. Approximately 1,500 cows entered Gaza for
the holiday last year.

Electricity
--------------


10. (SBU) According to the Acting Director of the Gaza
Electricity Distribution Company (GEDCO),Hani Salman, Gaza
requires 270MW of electricity, yet only approximately 190MW
is available from the Gaza power plant (55MW),Israel (117MW)
and Egypt (17MW). With typical rolling blackouts of four to
eight hours per day, Salman noted the rise in energy demand
in the winter risked increased energy cuts that would affect
health, water, and sanitation. Contacts at GEDCO note the
need for imported materials to maintain the network.

Hamas Continues to Test the Limits
--------------


11. (C) USAID humanitarian relief shipments to local NGOs
were halted on October 30, after the Hamas-led "Ministry of
Social Affairs" (MoSA) demanded beneficiary lists for relief
distributions be "coordinated" through the Ministry.
According to the UN, after the UN told MoSA that this
condition would cause major donors to halt all shipments to
Gaza, MoSA reportedly dropped this demand. USAID will
attempt to re-start shipments through its network of local
NGO partners on November 23.
RUBINSTEIN