By: Gaston Saidman

Last week, the Economic Committee met with Energy Minister Eli Cohen, who presented a report on the state of natural gas prices. This topic is generating great interest, but also great confusion among business leaders in the sector. Israel is at a key moment in its gas development, but no new drilling projects are being offered to investors, and it is reported that some companies, like Chevron, could take advantage of the lack of competition to raise prices.  

Minister Cohen criticized this, blaming the Ministry of Finance and calling its conduct in not taking action against Chevron irresponsible. He made it clear that if the company continues to raise prices, he will take the necessary measures.

The question that remained unanswered during the meeting was: what measures will Mr. Cohen take? Chevron is not a small company, and at the same time, it is one of the few operating in Israel, but this does not mean it will abuse its power to manipulate prices.

Israel seems to long for the day when it will no longer depend on natural gas or oil, especially for fuel development. This fact indicates that new opportunities will be created for renewable energy in the Israeli market. These renewables will compete with each other, which could balance prices and leave multinationals like Chevron behind. We know this is impossible; while Israel has an ambitious plan to reduce its dependence on certain minerals, the current strategy of preventing other companies from drilling in economically valuable waters is what ultimately drives prices up. Therefore, the measures imposed by Minister Cohen are based on increased investment in the development of electrical infrastructure. This reform allows Israelis to choose where they obtain their energy and electricity sources. Those who opt for this method reportedly save between 400 and 1,200 shekels per year. The ultimate goal is for 30% of electricity to come from renewable sources by 2030.

Two power plants have already been approved for 2029, and coal will be phased out for electricity generation by the end of 2026. Regarding natural gas production, the minister plans to encourage the development of additional offshore fields by expanding drilling and shipping licenses. According to Eli Cohen, this would be the way to balance prices, although nothing has been confirmed yet.