Oil Refineries Receives Request to Pay Sewage Levy

HAIFA, Israel, December 28 - Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter: the
"Company", "ORL"), Israel's largest oil refiner, announced that it has
received a request from the Municipality of Haifa for the payment of a Sewage
Levy to the amount of NIS 118 million. Based on the request details, the
Company must pay the Sewage Levy within 30 days, while submitting an appeal
on the charge, will not delay the payment requirement.

The Company vacates its sanitary discharges through a sewage
line which it built, at its expense, and therefore appealed to the Haifa
Municipality, and in turn the Municipalicy has requested a pause to review
the payment request. Despite this, the Municipality has notified the Company
that it will not agree to delaying the payment date for the review and
additional clarifications be completed, therefore the Company will move to
guarantee its rights in the matter is exhausted, as per all laws.

Following initial review, the Company believes that it has
good claims against the said request. To the best of the Company's knowledge,
additional companies whose factories are located near the Haifa Refinery,
also received Sewage Levy payment requests. These companies include Carmel
Olefins Ltd (a 50% subsidiary regarding which the Company has entered into an
agreement to purchase the balance of its shares), which has been requested to
pay a Sewage Levy to the amount of NIS 27 million, and which also evacuates
its sanitary sewage through the sewage line built by the Company, as well as
Gadiv Petrochemical Industries (a wholly owned subsidiary), which has been
requested to pay NIS 9.5 million.

About Oil Refineries Ltd.

Oil Refineries Ltd. (ORL), located in the bay area of the city
of Haifa, operates Israel's largest oil refinery. ORL operates sophisticated
and state-of-the-art industrial facilities with refining capacity of 9.8
million tons of crude oil per year, with a Nelson complexity index of 7.4,
providing a variety of quality products used in industrial operation,
transportation, private consumption, agriculture and infrastructure. The
Company is also active in the area of Polymers (through Carmel Olefins Ltd.)
and Aromatics (through wholly-owned Gadiv Petrochemical Industries Ltd.). ORL
is traded on the Tel Aviv Stock Exchange under the ticker ORL. For additional
information please visit the Company's website: www.orl.co.il

    Company Contact:                                

    Rony Solonicof
    Chief Economist and Head of Investor Relations
    Oil Refineries
    Tel. +972-4-878-8320
    ContactIREn@orl.co.il                           

    Investor Relation Contacts:

    Ehud Helft \ Fiona Darmon
    GK Investor Relations
    Tel. +1-646-797-2868 \ +972-52-695-4400
    info@gkir.com

Company Contact: Rony Solonicof, Chief Economist and Head of Investor Relations, Oil Refineries, Tel. +972-4-878-8320, ContactIREn at orl.co.il; Investor Relation Contacts: Ehud Helft \ Fiona Darmon, GK Investor Relations, Tel. +1-646-797-2868 \ +972-52-695-4400, info at gkir.com