The biggest class-action suit in Israeli history — $12.7 billion against the Tamar gas field consortium over exorbitant pricing — was given permission from the High Court on Thursday to pursue the claim.
The petitioner, an Israeli electricity consumer by the name of Moshe Nazri, initiated the legal action in June 2014, alleging in his petition that gas companies were exploiting their monopoly to charge the Israel Electric Corportation (IEC) $5.40 for a unit of gas-generated energy (mmbtu) when the real cost was $2.34.
This fantastic markup has enabled the companies to reap $567 million a year in profits, or an estimated 57 percent a year on its investment.
Nazri adduced the opinion of American gas economics expert Prof. James Smith to substantiate his claims.
The companies named in the suit are Isramco, Dor Energy, Delek Drilling, Avner Oil & Gas Exploration, the Delek Group and U.S.-based Noble Energy.
Nazri’s lawyers Yitzhak Yaari and Gilad Barnea hailed the court’s decision, saying it “removes one of the most significant legal obstacles on the way to compensating IEC consumers.
“In addition to the District Court, the High Court also rejected the Tamar monopoly and the attorney general’s attempt to prevent a deep and thorough discussion about the fairness of the natural gas prices charged by the Tamar consortium.
“We are convinced that at the end of the legal process, it will be found that the Tamar monopoly is using its monopolistic power to charge the most excessive price for the natural gas that belongs to every citizen of Israel.”
A statement from the consortium expressed confidence that the class-action suit was “futile” and destined to fail.
They characterized Nazri’s claims as exaggerated and out of touch with the way the industry set prices and signed contracts for natural gas.
The consortium also noted that Israel was only now rehabilitating “the considerable damage caused to its reputation” by the long-delayed natural gas industry framework signed by the government.