Finance Minister Seeks to Block Fuel Price Hike Amid Election Concerns

Finance Minister Bezalel Smotrich has ordered the advancement of an order to reduce excise tax on fuel, aiming to soften an anticipated rise in gasoline prices. The proposal under consideration is to lower the price for consumers by about half a shekel per liter, which would cost the state treasury approximately 300 million shekels in a single month. Professional staff within the Finance Ministry oppose this move, citing significant financial losses.

Simultaneously, a legal review is underway to determine if the Attorney General will approve the measure during the election period or rule it as an election tactic. The price of gasoline was expected to increase by 16 agorot to 8.25 shekels per liter, with 5 agorot of this increase attributed to an upward adjustment in the excise tax component itself.

The proposed tax reduction comes shortly after the Ministry of Energy announced the upcoming price hike. International market factors, including a roughly 6% increase in global gasoline prices, are primary drivers of the rise, partially offset by a 3% decrease in the dollar's exchange rate.

Professional sources within the Finance Ministry are against the initiative, estimating that every 10 agorot reduction in the price per liter of gasoline translates to a monthly revenue loss of about 30 million shekels for the state. Beyond the budgetary challenge, the legal hurdle concerning election economics is also being examined.

Smotrich's office confirmed the report, stating the minister "ordered to advance a reduction in the excise tax on fuel, in order to prevent the expected price increase resulting from the global energy crisis and ongoing tensions in Iran." Discussions are ongoing within the ministry to finalize the reduction amount and mechanism, with the minister intending to sign the order soon for implementation in the coming days.