Israeli Finance Minister Smotrich Seeks to Block Fuel Price Hike

Israeli Finance Minister Betsalel Smotrich intends to intervene again to curb an upcoming increase in gasoline prices, despite opposition from senior officials within his ministry. Smotrich convened ministry leaders on Tuesday to discuss a further reduction in fuel taxes aimed at mitigating a price rise scheduled to take effect on Thursday. Without intervention, the price of a liter of self-service unleaded 95-octane gasoline was set to increase by 52 agorot, reaching a record high of 8.27 shekels. This surge is attributed primarily to a roughly 13% rise in global oil prices and a nearly 3% strengthening of the U.S. dollar against the Israeli shekel.

Earlier in September, Smotrich had already implemented a temporary 50 agorot per liter tax cut on gasoline to counter a previous price spike. This measure, approved despite the ongoing election period, is currently in effect until the end of October and had temporarily lowered the price from 8.25 to 7.75 shekels per liter.

However, professional officials within the Finance Ministry are against another tax reduction. They argue that prices should be allowed to fluctuate according to the standard mechanism and that further tax cuts would lead to a loss of state revenue. Their projections suggest that gasoline prices could approach 9 shekels per liter in November, especially if the current temporary tax reduction expires as planned.

Despite this opposition, Smotrich is determined to find a way to curb the impending price increase. Any additional tax reduction would also require legal review, particularly given that Israel is several weeks away from national elections.