Israel Eyes Fuel Price Drop Below 8 Shekels Amid Tax Cut Plan
Translated & summarized from Now 14 by baba
Israel's Finance Ministry plans to cut fuel excise taxes by about 50 agorot per liter, aiming to bring the price below 8 shekels. This comes after prices hit a 14-year high, but global oil market volatility could affect future prices.
The story in 5 lines · by baba
- Israel plans fuel tax cuts to lower prices below 8 shekels per liter.
- Current gasoline prices reached a 14-year high of 8.25 shekels.
- The tax reduction is expected to decrease prices by about 50 agorot.
- Global oil market volatility poses a risk to sustained price drops.
- The Finance Ministry has received legal approval for the tax cut.
Israel's Finance Ministry is working to lower gasoline prices below 8 shekels per liter, a move that would offer relief to drivers after prices surged to a 14-year high. The current self-service price, including VAT, stands at 8.25 shekels per liter as of September 1st, an increase of 16 agorot from the previous month. This marks the highest price recorded since 2012, impacting drivers' budgets and transportation costs.
Finance Minister Bezalel Smotrich has received legal approval for a plan to reduce excise taxes on fuel, a measure expected to decrease the price by approximately 50 agorot per liter. This reduction would bring the price down to around 7.75 shekels per liter, a significant relief for daily commuters. The ministry is finalizing the plan, with an official announcement anticipated soon, and the reduction is expected to take effect as part of the ministry's broader initiative.
However, potential volatility in global oil markets could complicate sustained price decreases. Recent geopolitical developments, including military actions in the region and U.S. strikes against Iran, have raised concerns about fluctuating oil prices. Any further increase in global oil prices could negate the planned tax cut's impact on Israeli fuel costs in subsequent price updates.
The price of gasoline in Israel is determined monthly based on European fuel prices, the dollar exchange rate, and taxes. Significant shifts in the global market can quickly affect local prices. Earlier in September, forecasts had predicted a price drop below 8 shekels due to a slight decrease in oil prices, but this was reversed by market changes, the dollar's performance, and tax components, leading to the current high price.
