The practice of using profits generated from one product or service to support another provided by the same operating entity or the practice of charging higher prices to one group of consumers in order to subsidize lower prices for another group, effectively favorising or subsidizing the latter. Such a transfer, which is in fact an internal transfer, is known as cross subsidy.

In the Israeli Electricity Sector Law it is specifically stated that every price will reflect the cost of a particular service without reducing one price on account of another being increased.

In the natural gas for instance if adopted in the Israeli LNG sector, would have the disadvantage of higher gas price when it first penetrates the Israeli market and the need to make higher payments when the facility is not in use compared to lower payments when usage of the facility increases