Israel Plans 50 Agorot Fuel Tax Cut Amid Price Volatility

The Israeli Ministry of Finance announced on Thursday a proposed reduction in the fuel excise tax (Mas Hems) on gasoline by 50 agorot per liter. This measure is being introduced to allow the public to submit feedback on the decision.

According to the ministry, Finance Minister Bezalel Smotrich is expected to sign the tax reduction order after the public comment period concludes on Sunday, following a review of submitted remarks. If signed, the reduction will take effect immediately, with gasoline prices at stations anticipated to change at midnight between Sunday and Monday.

The announcement follows a period of significant fluctuations in fuel prices in recent months. In early August, the price of 95-octane gasoline rose to 8.09 shekels per liter for self-service, an increase of 61 agorot, attributed to global oil and gasoline price hikes and a stronger dollar.

The government had previously considered lowering the fuel tax to mitigate sharp price increases and ease the burden on consumers, given the impact of fuel costs on transportation and various economic sectors. The proposed 50 agorot per liter reduction, if approved, will lower the final gasoline price, though the actual price will remain tied to the monthly fuel pricing mechanism, influenced by global oil prices and the shekel exchange rate.