Outgoing head of Israel’s Antitrust Authority David Gilo shocked the Knesset Finance Committee on Wednesday with his allegation that the gas companies wield “huge power over the government.”
Gilo resigned recently from his post after the government formulated a compromise solution for regulating the gas monopoly that he charges will not ensure competition in the industry. Gilo had insisted on a major breakup of holdings in the country’s offshore reservoirs.
But it was the first time he has gone public with his allegation that “the gas companies threaten government ministries from a position of strength. There is real concern about the threats from the companies. They have huge power over the government,” Gilo said.
Meanwhile, Minister of Finance Moshe Kahlon and Governor of the Bank of Israel Dr. Karnit Flug announced a first step toward increasing competition in the banking and financial services industry. They appointed a committee for promoting competition, to be led by former Antitrust Authority director general Dror Strum.
Kahlon declared that “our goal, and that of the committee, is to bring about real competition in one of the most over-concentrated sectors of the Israeli economy — the banking system. We’re talking about a NIS 50 billion concentrated system in which households and small businesses don’t benefit from competition.
“A situation in which three banks control 70% of the industry is illogical. If we have learned anything, it is that over-concentration costs each household between hundreds and thousands of unnecessary shekels every year. Competition is the consumer’s best friend. It’s good for the companies and good for the people, and that’s why we want to promote it in every sector.”
More immediately, there was good news for consumers of bread products.
Minister of the Economy Aryeh Deri and Minister of Finance Moshe Kahlon are expected to sign an order lowering bread and challah prices subject to price controls by 4.8%, following a prolonged drop in global wheat prices.
Said Minister Deri: “Cutting bread prices will enable many families in Israel, especially needy and hardworking families, to pay less for a basic commodity consumed in every home. We’ll take advantage of every opportunity to lower prices, especially prices of basic commodities, thereby decreasing the cost of living.”