In About-face, Economy Minister Dery Says He Will Override Antitrust Chief on Gas

Reversal by Shas leader means framework agreement on natural gas cartel will go to cabinet soon.

Shas leader Arye Dery in the Knesset, May 14, 2015
Shas leader Arye Dery in the Knesset, May 14, 2015. Olivier Fitoussi

Prime Minister Benjamin Netanyahu moved closer to getting approval of a plan for dealing with the natural gas cartel after Economy Minister Aryeh Dery Tuesday reversed himself, saying he was now ready to sign an order overriding the former antitrust commissioner, who resigned in opposition to the plan.

As a result, Netanyahu is expected to bring the framework agreement reached with the gas companies for cabinet approval as early as next week and then present it to the Knesset. Coalition sources said the prime minister was likely to be able to enlist a Knesset majority with the help of the opposition party Yisrael Beiteinu.

But approval still faces obstacles. Dery said he would use his power under clause 53 of the Antitrust Law only if the cabinet and Knesset both approved the framework. Moreover, the government has yet to hold a public hearing on the framework agreement and it is not at all clear it will be able to squeeze that into the week left before the Knesset goes into summer recess after July 29.

Knesset member Eitan Cabel (Zionist Union) revealed the Dery turnaround after he met in his role as chairman of the Knesset Economic Committee on Monday night with Dery, Energy Minster Yuval Steinitz and Deputy Attorney General Avi Licht.

Cabel’s committee will have held consultations with Dery before the latter signs the override. “Because this is the first time in the history of Israel that the government is asking to use this clause, we need to formulate procedures for consultations,” Cabel said, adding he did not know how long such a process would take.

Dery was reportedly angry that Cabel revealed his turnaround and thus pulled back a little bit by conditioning it on cabinet and Knesset approval. “Netanyahu and Steinitz have said the government will approve the framework and from there it will go to the Knesset,” he said. “Only after approval by the full Knesset will I consider acting on clause 52.”

Nevertheless, energy shares rallied on the Tel Aviv Stock Exchange yesterday in an otherwise slumping session. Ratio finished up 5% to a close at 36 agorot (9 cents), Avner was ahead 4.6% at 2.98 shekels and Delek Drilling up 4.5% at 15.74. Delek Group, the holding company that controls Avner and Delek Drilling, added 3.4% to 11.47.

Dery did his about-face under intense pressure from the prime minister, whose efforts to win government backing for the framework deal has been held up by public criticism of its terms, and by legal barriers created by former Antitrust Commissioner David Gilo’s refusal to approve the framework, which was reached with Delek and the Texas company Noble Energy. Gilo said it gives the two companies too much power over the market.

If Netanyahu fails to get the framework to a Knesset vote by July 29, his next opportunity will only come September 2, which will be a legislatively crowded day as lawmakers are scheduled to vote on the first reading of the 2015-16 budget and Budget Arrangements Law.

Dery took Netanyahu by surprise last month when at the end of a meeting of the security cabinet he announced he would not sign clause 53, even though ministers had agreed that national security concerns about gas and energy would take priority over concerns about the cartel. Netanyahu subsequently failed to muster a Knesset majority as a substitute for the override.