MK Dov Khenin (Hadash) welcomed a Supreme Court ruling rejecting the government’s increase of gas and oil royalties. “The Supreme Court has upheld our position that there was nothing retroactive in upping the royalties,” he said. MK Kenin said he would propose legislation that raises government royalties from natural resources once the new Knesset session begins. “Now we need to raise the Dead Sea royalties [less than 10%], phosphate [even less] and mineral water [where there are no royalties at all]. At the opening session of the Knesset I will promote comprehensive legislation on the subject,” added.

The High Court of Justice on Wednesday rejected petitions by two oil and gas exploration firms against the so-called Sheshinski Law, upholding the state’s right to increase its share of their revenues. Isramco, a partner in the Tamar and Shimshon natural-gas licenses, and Givot Olam, owner and operator of the Meged oil-field license, led the petitions, arguing that the law would harm them retroactively. They said they had obtained their property rights and made large investments before the government decided to establish the Sheshinski Committee.

Judges Miriam Naor, Uzi Vogelman and Zvi Zylbertal wrote in their ruling that as the law does not apply to previous revenue, it cannot be considered retroactive. They said although the petitioners began investing before the new law was passed, tax-rate amendments are a common legislative scenario.

“This law does not contradict Israel’s values as a Jewish and democratic state. With regard to property rights, no disproportionate harm has been done,” the judges wrote. Under the 2011 Oil and Tax Revenues Law, which was based on the Sheshinski Report’s recommendations, the state’s share of net profits from oil and gas production rose from the previous one-third to 52 percent to 62%. The initial levy on the companies will stand at 20% and rise gradually to 50%, depending on the amount of excess profits, while the rate of royalties will remain at 12.5%.