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Competition Authority Calls for Transparency in Petroleum Sector

The Palestinian Competition Authority has launched an investigation into the opaque management of import quotas and licenses in the petroleum sector, exposing widespread corruption and mismanagement.

Background

According to a recent report by the World Bank, the Palestinian Petroleum Commission (PPC) was established in 1994 as the monopoly supplier of petroleum products in the West Bank. However, the commission operated without a regulatory framework for its operational and financial operations, resulting in revenue diversion and non-transparent purchase agreements.

Challenges

• The PPC adopted monopolistic pricing policies, creating incentives for smuggling and unofficial sale of petroleum products, leading to revenue loss for the Palestinian National Authority (PNA).
• The lack of an effective accounting system, financial reports on accounts receivable, and bank reconciliation contributed to the opacity in the sector.
• Despite progress made, significant weaknesses remain, including:
  • Separating reporting of the commission’s financial performance and balance sheet
  • Promoting transparency in procurement
  • Establishing a clear governance framework for the sector

Land Management Under Spotlight

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The PNA’s land management practices have also come under scrutiny, with concerns raised about opaque disposal and allocation of state land, lack of clear criteria for decision-making, and lack of monitoring of land use. The World Bank has identified several governance weaknesses in state land administration, including:

• Discretionary allocation of state land to influential figures
• Non-payment of fees to the Treasury
• Lack of financial disclosure on state land transactions

Anti-Corruption Efforts

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The PNA has implemented anti-corruption reforms and strategies since 1997, but more needs to be done to combat corruption. The World Bank has identified several areas where progress is needed, including:

• Strengthening institutional capacity
• Improving access to information on state land management and allocation
• A systematic approach to restitution of State land

Conclusion

The Palestinian Competition Authority’s investigation highlights the need for greater transparency and accountability in the petroleum sector and land management practices. The PNA must continue to implement reforms to address these governance challenges and combat corruption in order to deliver basic public services and promote economic development.