Fuel Prices to Drop by 50 Agorot as Tax Cut Approved

The price of gasoline in Israel will decrease by 50 agorot per liter starting Sunday at midnight, following approval from the Finance Ministry's legal counsel and the Attorney General. This marks the second reduction in excise tax within two months. The Finance Ministry's legal advisor stated there is no impediment for the Finance Minister to sign off on the fuel price reduction for the upcoming month. The Attorney General subsequently confirmed no objection to the move.

This decision comes after fuel prices surged to an all-time high of 8.27 shekels per liter on Thursday night, an increase of 52 agorot from the previous month. In September, the Finance Minister had already signed an order for a temporary reduction in fuel tax, lowering the price by 50 agorot after a similar price hike earlier that month.

Global factors, including rising oil prices and disruptions in international supply chains, partly due to the conflict between Iran and the United States, have contributed to the surge in fuel costs worldwide. The current tax reduction is set to be in effect for one month and will expire in November. It is projected to reduce state revenues by approximately 150 million shekels for the month, mirroring the revenue loss from the previous tax cut.

Finance Minister Bezalel Smotrich announced on his X account earlier in the week that he had instructed ministry professionals to deepen the subsidy to offset the anticipated rise in fuel prices. He attributed the expected price increase to a significant energy crisis stemming from the war in Iran, noting that fuel prices in the US have more than doubled. Smotrich asserted that Israel's responsible economic management allows it to mitigate these price hikes even while engaged in an existential conflict.