Israel to Cut Fuel Tax Temporarily Amid Price Surge

The price of gasoline in Israel is set to decrease by 0.50 shekels per liter starting September 7th. Finance Minister Bezalel Smotrich plans to sign an order temporarily reducing the excise tax on fuel. This measure is expected to lower the maximum regulated price for a liter of 95-octane gasoline at self-service pumps to 7.75 shekels.

The decision comes in response to a recent sharp increase in fuel prices. On September 1st, the price of gasoline rose by 0.16 shekels to 8.25 shekels, reaching an all-time high. The previous record price was observed in September 2012.

The excise tax reduction is intended to be a temporary measure, effective from September 7th until October 31st, 2026. According to accompanying documents, the goal is to offset the increased cost of fuel for consumers following the recent price hike.

The timing of this decision, ahead of elections, has drawn attention, with opponents potentially viewing the tax cut as a populist move. However, the Ministry of Finance's legal advisor has recommended approving the order, a stance supported by the Attorney General.

The current record fuel prices are attributed to rising global oil costs, although a strengthening shekel against the dollar has partially mitigated the increase.