Israel Eyes Further Fuel Price Cut Amid Global Energy Crisis
Translated & summarized from Now 14 by baba
Israel's Finance Ministry is planning an additional fuel price subsidy to offset a record upcoming increase, aiming to ease the burden on drivers and the economy amid global energy market volatility.
The story in 5 lines · by baba
- Israel plans further fuel price reduction via excise tax cut.
- Gasoline price was set to hit record NIS 8.27 per liter.
- Global energy prices and dollar strength caused the hike.
- Previous tax cut was insufficient to offset rising costs.
- New reduction expected by early next week.
The Israeli Ministry of Finance is preparing to implement an additional subsidy on fuel prices to counteract a significant upcoming price hike. Finance Minister Bezalel Smotrich has instructed ministry officials to formulate a plan for a further reduction in the excise tax (Mas Blou) on gasoline. This move aims to mitigate the impact of the global energy crisis and prevent drivers from experiencing one of the sharpest price increases to date.
The price of a liter of 95-octane gasoline was set to jump by 52 agorot to a record NIS 8.27 starting October 1st. This increase, even with a previous tax reduction already in effect, represents a roughly 6.7% rise from the current price and surpasses the previous September high. The surge is attributed to a nearly 13% increase in international gasoline prices and a 3% strengthening of the US dollar against the Israeli shekel.
Smotrich held discussions with ministry professionals regarding the possibility of an additional reduction. While the exact amount of the decrease has not yet been determined, the Ministry of Finance stated that the goal is to lessen the burden on drivers and curb the broader economic effects of higher fuel costs, which can impact transportation and the prices of other goods and services.
Last month, Smotrich approved a temporary 50 agorot per liter reduction in the excise tax, which was set to remain in effect until the end of October. However, global market fluctuations and currency exchange rates have largely offset this measure. The new proposed subsidy is expected to cost hundreds of millions of shekels, depending on the final reduction amount.
Due to the upcoming holidays and the necessary procedural steps for approving the tax order, the additional reduction will not affect the price that takes effect on October 1st. If approved and finalized, the new, lower price is anticipated to be reflected at the pumps by early next week, around October 5th. Until then, drivers will pay NIS 8.27 per liter for self-service, with an additional 26 agorot per liter for full service.
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