Israel to Cut Fuel Prices by 0.5 Shekels Per Liter Amid Record Highs
Translated & summarized from Vesty by baba
Israel will reduce gasoline prices by 0.5 shekels per liter starting September 7, bringing the cost to 7.75 shekels, following a recent record high of 8.25 shekels. The decision was approved by the Finance Minister despite initial legal concerns.
The story in 5 lines · by baba
- Gasoline prices in Israel to drop by 0.5 shekels per liter on September 7.
- New price for 95-octane fuel will be 7.75 shekels per liter.
- Reduction follows recent record high prices reaching 8.25 shekels.
- Finance Minister Smotrich secured approval for the excise tax cut.
- The measure aims to alleviate high fuel costs for consumers.
Effective midnight on September 7, the price of gasoline in Israel will decrease by 0.5 shekels per liter, bringing the cost of 95-octane fuel at self-service stations to 7.75 shekels. This reduction follows Finance Minister Bezalel Smotrich's successful navigation of legal hurdles to implement the excise tax cut. Initially, the government's legal advisor questioned the legality of such a move by a transitional government, but the finance ministry's legal counsel, Dudi Kopel, argued for its urgency due to high prices. This stance allowed Smotrich to sign the decree.
The regulated price of gasoline had previously reached a historic high of 8.25 shekels per liter in September, up from 6.85 shekels in January. This increase was attributed to the conflict with Iran, the closure of the Strait of Hormuz, and rising natural gas prices in Europe. The current price cut applies only to state-regulated gasoline, not diesel or LPG.
The excise tax reduction is estimated to cost the state approximately 155 million shekels per month, totaling around 310 million shekels. This will be funded by surplus funds from the finance ministry, generated by personal import tax exemptions. For comparison, a similar excise tax cut implemented during the 2022 elections was longer-lasting and more substantial.
This price drop comes after a surprising surge on September 1, when gasoline prices hit a 14-year high of 8.25 shekels per liter. Analysts had predicted a slight decrease, but the Ministry of Energy cited a 6% rise in international gasoline prices, only partially offset by a 3% dollar depreciation.
The historical peak price for 95-octane gasoline was also 8.25 shekels per liter, recorded in September 2012. At that time, Prime Minister Benjamin Netanyahu first proposed a fuel excise tax reduction. Fuel tax breaks were later canceled but reinstated in the summer of 2022 by then-Finance Minister Avigdor Lieberman, pushing prices above 8 shekels again and prompting government intervention.
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