Paris Protocol: Between Constraint and Decision Margin

In Palestine, the prices of gasoline, diesel, gas, and water are not read as mere passing service numbers, but as a concentrated mirror of a highly complex economic and political situation. These prices do not merely form at the fuel pump or in the water bill, but within a broader structure governed by agreements, taxes, supply mechanisms, and a limited capacity for local intervention. Therefore, the question of their cost does not start from the market, but from the framework that has organized the economic relationship since 1994, namely the Paris Economic Protocol. This framework has not remained confined to texts but has moved into the details of daily life. Every rise in fuel prices, every tightening of the tax margin raises a fundamental question: To what extent do we actually possess our economic decision-making? And to what extent do we operate within a margin that was originally designed to remain limited? This question does not pertain only to decision-makers but also affects the farmer, the factory owner, the truck driver, and the head of the household who ultimately pays the cost of every economic squeeze. In the case of gasoline, the constraint appears most clearly. The price does not move freely; it remains tied to a mandated reference market, within a ceiling that does not allow a difference greater than 15% from the price in Israel. This percentage is not a mere technical detail, but a direct limit to the margin of movement. Thus, local decisions do not lead to price changes, but rather follow them. However, the situation is not the same for all derivatives. Diesel and gas are not constrained by the same ratios in the text, which opens a relatively wider margin for local intervention. While this margin is not absolute due to constraints on supply, taxation, and the reference market, it remains a space that can be used. Here, the discussion shifts from merely describing the constraint to accountability: Has this margin actually been used to alleviate the burden? The importance of this question lies specifically in the nature of diesel. It is not just a fuel but a primary input for transportation, agriculture, storage, services, and certain production patterns. Any increase in diesel does not remain at the pump but immediately affects the entire economy. The cost of transporting goods rises, the burdens on producers expand, and the increase eventually reaches the consumer in the form of general inflation. In this sense, the citizen does not only pay for fuel but pays a multiplied cost for everything they purchase. The tax margin is equally important as the price margin. The available difference in value-added tax does not exceed two percentage points (between 15% and 17%). This difference may seem narrow, but economically it is not without value. In moments of pressure, two points can alleviate part of the cost of production inputs or some basic goods. The question here is not solely about the size of the margin but about how it is used. The figures reveal that the issue is deeper than mere complaints. An annual loss of no less than $306 million in untransferred revenues represents a direct drain equivalent to 3.6% of GDP and nearly 18% of tax revenues. More importantly, reducing this leakage could have created nearly 10,000 job opportunities annually. These are not technical details, but indicators of broad economic and social costs. As for water, its story is more complex. It is not subject to the Paris Protocol in the same manner, but it is part of a system reliant on purchasing, supplying, and infrastructure. In 2022, about 98.8 million cubic meters of water were purchased, equivalent to 22% of the total available water. This figure does not only explain part of the cost but also reveals the degree of reliance on an external source. At the level of daily life, the gap appears even clearer. The average daily consumption of a Palestinian individual is about 85.7 liters, which is less than the minimum reference (100 liters), while the consumption in Israel reaches about 300 liters daily. We are not just talking about numbers here but about a gap in access to a basic resource, reflecting a deeper imbalance in the structure of the economy. In reality, the citizen does not read these legal details but faces their direct outcome. A driver pays higher costs, a farmer bears multiplied burdens, and a trader transfers the increase to the final price. Thus, the constraint shifts from a clause in an agreement to a daily burden in people's lives. Therefore, the complete picture cannot be summarized in a single clause. We are faced with a structure that combines a clear price constraint on gasoline, a narrow tax margin, significant annual financial losses, and an increasing reliance on water. These elements combined explain why the cost rises rapidly and why purchasing power declines. However, the most important point lies not just in the existence of the constraint but in how to deal with it. The available margin, despite its narrowness, is not non-existent. It could—and still can—be used more effectively, through alleviating certain fees, or directing support more precisely, or improving distribution and management efficiency. Smart intervention does not eliminate the constraint but mitigates its impact. The problem is no longer in knowing the constraints but in coexisting with them without attempting to reduce their effects. Between the texts of agreements and the margins of decision, the daily economic reality of the citizen is shaped. In the end, the efficiency of economic policy is not measured solely by its ability to explain the constraints but by its ability to use what remains of the margins. The issue is no longer what the agreement constrained, but how long we will be satisfied with just interpreting it rather than transforming what is available—even if limited—into tools that alleviate the burden on people.