Israel to Cut Fuel Prices by 50 Agorot Amid Record Highs

Israel's Ministry of Finance is advancing a plan to reduce the price of gasoline by 50 agorot per liter for one month, bringing it down from a record high of 8.27 shekels to 7.77 shekels. This move comes after the price of gasoline surged by 6.7% overnight to reach its highest point. The proposed reduction is pending the approval of the government's legal advisor.

The Ministry of Finance stated that its legal counsel sees no impediment for Finance Minister Bezalel Smotrich to sign off on the price cut. Once the government's legal advisor provides her opinion, the decree will be published for public comment. Smotrich intends for the reduction to last for one month, subject to public feedback.

This is a subsequent measure after a similar 50 agorot reduction was implemented in the previous month. The new cut is estimated to cost the state approximately 150 million shekels per month. The prior subsidy, intended to offset rising fuel costs, cost around 310 million shekels over two months.

The decision faces internal opposition from professional officials within the government, who argue that Israel's fiscal situation is not optimal and that tax reductions now could lead to increased debt or future tax hikes. The recent price surge is particularly notable as a previous excise tax reduction, championed by Smotrich, is still in effect. That earlier reduction had temporarily lowered the price to 7.75 shekels per liter in September, but global energy price increases and a 3% strengthening of the dollar against the shekel have erased those savings.

The primary driver for the price increase, according to the Ministry of Energy and Infrastructure, is a roughly 13% rise in international gasoline prices, attributed to rising oil costs and concerns over global energy supply stability.