Israel Approves Fuel Tax Cut Amid Economic Concerns

Israel's Attorney General Gali Baharav-Miara has approved a plan by Finance Minister Bezalel Smotrich to reduce the excise tax on fuel, effectively lowering the price of gasoline by approximately half a shekel per liter. The decision comes despite strong opposition from professional staff within the Finance Ministry, who expressed concerns that the move might be politically motivated ahead of elections.

Earlier, the legal advisor to the Finance Ministry, Dudi Koppel, submitted an opinion to the Attorney General. While acknowledging that the proposed reduction in the fuel excise tax contradicts the professional echelon's stance, Koppel noted that similar measures were implemented in Israel and other countries in 2022. He concluded that, considering the need to alleviate the cost of living, there was no legal impediment to approving the plan.

Smotrich stated that the measure aims to soften the anticipated increase in gasoline prices for consumers. The reduction is estimated to cost the state budget around 300 million shekels per month. Currently, a liter of 95-octane gasoline costs 8.25 shekels, and the price is expected to drop to 7.75 shekels following the tax cut.

The Finance Minister intends to sign the order promptly, aiming for the price reduction to take effect by the end of the week. This move is expected to provide relief to many drivers facing rising fuel costs in recent months.