Israel's Finance Minister Seeks to Cut Fuel Tax Amid Price Hike

Israeli Finance Minister Bezalel Smotrich has ordered the development of a mechanism to reduce excise taxes on fuel, aiming to counteract an anticipated price increase scheduled for this week. Smotrich's office stated that professional discussions are underway to determine the exact reduction amount and the precise mechanism. The Finance Minister intends to sign the order as soon as possible to ensure the reduction takes effect in the coming days.

Previously, the Fuel and Gas Administration at the Ministry of Energy and Infrastructure announced a 16 agorot per liter increase, set to take effect Tuesday night. The price for a liter of 95-octane unleaded gasoline at self-service stations was slated to rise to 8.25 shekels. Simultaneously, the price for full-service stations was to increase by one agora, reaching 26 agorot per liter.

Bat Sheva Abuhazira, director of the Fuel and Gas Administration, explained that the price hike was driven by several factors. These included a global increase in gasoline prices of approximately 6%, partially offset by a roughly 3% weakening of the dollar, contributing about 10 agorot to the liter price. Additionally, an update to the excise tax component by the Tax Authority, linked to the consumer price index, added about 5 agorot, and a semi-annual adjustment to the marketing margin added one agora. The combined effect of these factors resulted in the 16 agorot increase for September.