Antitrust Committee Blocks Shapir Energy's Bid to Increase Stake in Ashdod Oil Refinery

Israel's Antitrust Committee has ruled, by a 2-1 majority, that Shapir Energy Ashdod, owned by the Shapir Group, cannot increase its ownership stake in Bazan Ashdod Refinery (Bazan Ashdod), the country's second-largest oil refinery. The proposed acquisition, reported by Globes in April, involved exercising options to raise Shapir's stake from 10% to 65%, requiring an investment exceeding one billion shekels. The committee opposed the deal, citing concerns that it would excessively concentrate market power, as Bazan already controls about 40% of Israel's fuel and cooking gas supply. Competition Commissioner Michal Cohen and Finance Ministry Director-General Israel Malka voted against the purchase, while National Economic Council Chairman Avi Simhon supported it conditionally, requiring Shapir to make significant investments in the refinery.

Recent months have seen a sharp increase in refinery profits due to a widening refining margin between relatively high crude oil prices and even higher fuel prices. This margin expansion results from a combination of the Hormuz Strait blockade and reduced refining capacity in Russia caused by Ukrainian attacks. These factors create exceptional profit potential for Israel's two refineries: the larger Bazan in Haifa and the smaller Bazan Ashdod refinery. The committee's decision reflects concerns over market concentration despite the lucrative environment for refineries.