Israel to Cut Fuel Prices by 50 Agorot After Record High

The Israeli government has decided to temporarily reduce the excise tax on fuel, leading to a significant price drop for gasoline. Effective soon, the price of 95-octane gasoline will decrease by 50 agorot per liter, from the current 8.25 shekels to 7.75 shekels. This measure, intended to alleviate the economic burden on citizens and the country following a record surge in fuel costs, will be in effect for two months, until October 31.

The decision was enabled by the legal advisor to the government, Gali Baharav-Miara, who permitted Finance Minister Bezalel Smotrich to implement the temporary excise reduction. Despite Israel being in a pre-election period, Ministry of Finance professionals determined that such a temporary tax cut is permissible, citing a precedent from when Avigdor Lieberman served as Finance Minister.

The price hike that prompted this action saw the maximum price for a liter of 95-octane gasoline reach 8.25 shekels on September 1, the highest since September 2012. Several factors contributed to this increase, including global oil prices, refining margins, currency exchange rates, a recent excise tax hike of 5 agorot per liter (linked to the consumer price index), and adjustments to marketing premiums. The upcoming price reduction is expected to more than offset the recent tax increase.