Antitrust Committee Advises Against Shapir's Acquisition of Ashdod Oil Refinery

Israel's Antitrust Committee has recommended rejecting Shapir Group's bid to acquire control of the Ashdod oil refinery, citing concerns over excessive concentration of economic power. The committee's majority, including Chair Michal Cohen and Finance Ministry Director General Israel Malachi, warned that granting Shapir control over the refinery would place the company among the most dominant economic players in Israel, potentially giving it disproportionate leverage over government policy. The Ashdod refinery is a critical infrastructure asset, supplying about 40% of Israel's fuels and cooking gas and serving as a major logistical hub, especially as the Haifa refinery is slated for closure, which could leave Ashdod as the country's sole refining facility.

The committee expressed fears that Shapir's expanded control, already significant in sectors like Jerusalem and Gush Dan light rail, toll roads, and quarries, could create a "regulatory hostage" scenario, where the government becomes dependent on a single dominant entity in both routine and emergency situations. They also noted Shapir's existing lobbying apparatus, which could amplify its influence if combined with refinery ownership.

In a dissenting opinion, Professor Avi Simhon, Chair of the National Economic Council, argued that the refinery urgently needs an investor to fund approximately one billion shekels in upgrades, including replacing maritime connections and preparing for the Haifa plant's closure. He warned that without such investment, the refinery faces strategic risks that could harm consumers. However, the majority maintained that the refinery is financially stable and can continue operating as an independent public company without a controlling shareholder.

The committee's recommendation was submitted to the Government Companies Authority for final decision. The outcome will significantly impact Israel's energy sector structure and the balance of economic power in critical infrastructure.