Israel Approves Significant Fuel Price Reduction Next Week

Israel's Ministry of Finance has published a directive to reduce excise tax on gasoline by half a shekel per liter. Finance Minister Bezalel Smotrich is expected to sign the order on Sunday, with the new price taking effect at midnight between Sunday and Monday.

The move comes after the Attorney General, Gali Baharav-Miara, approved the measure despite opposition from professional staff within the Finance Ministry. The legal advisor to the Finance Ministry, Dudi Kofel, had noted that while the reduction was contrary to the professional stance, there was no legal impediment given similar past actions in Israel and abroad, and the need to alleviate the cost of living.

This reduction aims to soften an anticipated price increase for consumers. The cut of approximately half a shekel per liter is estimated to cost the state budget around 300 million shekels per month. The measure is a response to a recent rise in fuel prices, bringing the current price of 95-octane self-service gasoline to 8.25 shekels per liter.

With the new directive, the expected price for a liter of 95-octane self-service gasoline will be approximately 7.75 shekels, a notable decrease from the current price. Smotrich's office stated that the minister ordered the excise tax reduction to prevent the anticipated price hike. Earlier this month, the Ministry of Energy and Infrastructure had updated fuel prices, with 95-octane gasoline increasing by 16 agorot due to global market price rises and periodic tax adjustments.