Israeli Government Reaches Agreement with British Companies on Supply of Oil Products

An agreement with Shell-Socony-Vacuum to supply refined oil products sufficient to meet the nation’s domestic requirements was announced today by the Israeli Government.

Shipments are expected to begin immediately but the government as a “precautionary measure” will not relax the current restrictions on fuel consumption. The continuance of the rationing is also based on the need of Israel to conserve foreign exchange. The three companies consented to continue to supply refined products as long as there are no hostilities. The agreement reserves the right of the Israeli Government to obtain additional supplies from other sources.

An Israeli spokesman disclosed that in addition to supplies from these sources, the government had ordered unspecified quantities of refined oil products elsewhere. He added that the present oil supply situation was “satisfactory.”

The Shell-Socony-Vacuum deal was proposed by the companies as a “provisional expedient” until work is resumed at the Haifa Consolidated Refineries under British management. It is understood here that negotiations are under way between the government and the British officials of Consolidated looking to the reopening of the Haifa plant.

If these negotiations prove fruitless after a reasonable period, the government may feel compelled to reopen the Haifa installations itself, according to reports here. In this connection, it is pointed out that when the British closed down their Haifa refineries last spring, the company officials insisted that the plant could not operate without benefit of their trained personnel. Jewish employees, however, entered the plant and found that they could operate it without British or Arab workers, and they processed some 40,000 tons of crude oil that had been left in the Haifa tanks when the British halted operations.