Israel's Finance Minister Seeks to Halt Fuel Price Surge
Translated & summarized from Walla by baba
Israeli Finance Minister Bezalel Smotrich held an emergency meeting to address an impending fuel price hike. The price of gasoline is expected to reach a record high, prompting discussions on further excise tax reductions, though legal approval during an election period is a significant hurdle.
The story in 5 lines · by baba
- Finance Minister Smotrich met to prevent a record fuel price increase.
- Gasoline prices are set to jump by 52 agorot to 8.27 shekels.
- Reducing excise tax is considered, but faces legal and financial challenges.
- A similar tax cut earlier in October was an exceptional measure.
- International fuel prices and dollar strength are driving the increase.
Finance Minister Bezalel Smotrich convened an emergency meeting with senior ministry officials on Tuesday to find ways to prevent a significant expected rise in fuel prices. The price of a liter of 95-octane gasoline at self-service stations is set to increase by 52 agorot, from 7.75 shekels to a new record of 8.27 shekels, overnight between Wednesday and Thursday.
A potential reduction in fuel excise tax is once again on the table, but its legal approval is uncertain this time. A similar measure was implemented at the beginning of October, reducing the tax by 50 agorot per liter, which brought the price down to 7.75 shekels. This reduction, which was approved as an exception due to the election period and faced opposition from professional staff concerned about the cost to the state, is currently set to expire at the end of October.
The new price of 8.27 shekels already factors in the existing discount. Without it, drivers would be paying even more. To offset the current increase, a further tax reduction would be necessary, raising questions about whether the legal counsel will approve another exceptional measure so soon after the previous one, especially during an election period.
The previous 50-agora tax cut was estimated to cost the state treasury approximately 155 million shekels per month. An additional reduction of a similar magnitude would further increase revenue losses, which was the initial reason for professional staff opposition.
The current price hike is primarily attributed to a roughly 13% increase in international gasoline prices and a 3% strengthening of the dollar against the shekel during the calculation period. This combination has led to the 52-agora increase, erasing the earlier discount and surpassing the previous record price by two agorot. The ongoing discussion aims to find a solution to at least mitigate this rise, with the challenge being not only financial but also securing legal approval for another exception.
