Israel Slashes Fuel Tax to Curb Record Gas Prices
Israel's Ministry of Finance announced on Thursday a reduction of 0.5 shekels in the excise tax on gasoline, a move intended to lower fuel prices at stations starting next week. Following administrative procedures on Sunday, Finance Minister Bezalel Smotrich is expected to sign the order, with the reduced price taking effect at midnight between Sunday and Monday.
The tax cut aims to counteract a sharp increase in gasoline prices, with 95 octane self-service fuel reaching 8.25 shekels per liter, matching an all-time high set in September 2012. This surge is attributed to the global energy crisis and heightened security tensions with Iran.
Bat-Sheva Abuhazira, director of the Fuel and Gas Administration at the Ministry of Energy and Infrastructure, explained that international gasoline prices rose by approximately 6%, while the dollar exchange rate decreased by about 3%. These factors combined contributed to a roughly 0.10 shekel increase per liter.
Initially, Smotrich's directive to lower the tax faced internal opposition within the Finance Ministry and required complex legal review due to being implemented during an election period. The Ministry of Justice ultimately approved the excise tax reduction, paving the way for the order to be executed and the anticipated price decrease.
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