Bazan Warns Haifa Municipality Over Business License Renewal

Israel's largest oil refinery, Bazan Group, has escalated its warnings to investors regarding potential disruptions to its operations. In a report filed with the Tel Aviv Stock Exchange, the company stated that failure to renew its business licenses could "materially and adversely affect the company's operations." This warning follows a summons from the Haifa Municipality for the group's management to a hearing concerning the possible cessation of factory operations. The hearing, scheduled for Sunday, October 25, will address the renewal of temporary permits for Bazan, Carmel Olefins, and Gadiv Petrochemical Industries, which expire on October 31. The municipality is considering not renewing the permits, issuing an administrative cease and desist order, or seeking a judicial order to halt operations. Representatives from the Ministry of Health, the Ministry of Environmental Protection, and the Haifa Bay Municipal Association were also invited to the hearing. The dispute is linked to a significant benzene pollution incident earlier in October during maintenance work at the Gadiv plant. High levels of the carcinogen detected by monitoring stations led to the temporary relocation of students from two schools in Kiryat Ata and the halting of work by the Ministry of Environmental Protection, which also issued an administrative order against Gadiv on October 14. Bazan asserts that all relevant authorities have already approved the permit renewals and is questioning the municipality's legal authority to take the proposed actions. The municipality, however, points to repeated instances of abnormal benzene levels measured around the plants between 2020 and 2024. A shutdown would impact national infrastructure, as Bazan's refinery supplied approximately 59% of Israel's diesel and 49% of its gasoline last year. The refinery processed about 186,500 barrels of crude oil per day in the second quarter of 2026. Gadiv and Carmel Olefins rely on the refinery for raw materials, meaning a disruption at one facility affects the others. Bazan's stock, which has risen over 120% year-to-date, saw a slight decline today, partly due to the benzene incident and ongoing market concerns about the government's 2030 plan to relocate petrochemical industries from Haifa Bay.