Energy Ministry publishes plan proposing to move Haifa oil refineries down south instead of closing them

The Energy Ministry publishes a strategic plan for Israel’s fuel economy through 2040 that includes moving the Bazan oil refineries from the northern city of Haifa to the south of the country, contrary to a 2022 government decision to close them down and end domestic refining.

Conducted by the BDO consulting firm, the study emphasizes that relying solely on imported refined products poses excessive national security risks during wartime or global crises.

The proposed “clear-and-build” initiative, estimated to cost $5 to $6 billion, would involve establishing a hybrid refinery in southern Israel that could eventually also make products such as sustainable aviation fuel and biodiesel.

Rather than compensating Bazan for closure, the plan suggests using state revenues from carbon taxes to move the facility.

The plan also includes expanding emergency fuel stores, upgrading port and storage infrastructure, and establishing additional fuel entry points.

An inter-ministerial team will examine creating a dedicated fuel authority to oversee implementation of the plan.