Israel's Finance Ministry to Cut Fuel Excise Tax Amid Record Prices

Israel's Ministry of Finance has approved an additional excise tax reduction of 0.5 shekels per liter on gasoline, a decision pending approval from the government's legal advisor. The ministry announced on Thursday, October 1, that its legal counsel sees no obstacles to the Finance Minister signing an order to lower gasoline prices for the upcoming month. The proposed reduction of 50 agorot per liter is intended to be in effect for one month, following a similar 50 agorot cut approved last month. This new measure will be published for public comment before being finalized. The decision comes after gasoline prices reached a record high of 8.27 shekels per liter for 95-octane fuel on the morning of October 1, an increase of 52 agorot. Without the previous tax reduction, the price would have been 8.77 shekels per liter. If approved, the new reduction would bring the price down to 7.77 shekels per liter, making the total discount one shekel. The duration of this measure is limited to one month, ending shortly after the upcoming elections, with the future price of gasoline remaining uncertain and dependent on global market trends. The previous subsidy for fuel price increases, also initiated by Minister Smotrich, cost the state approximately 310 million shekels over two months. The current proposed reduction is estimated to cost the treasury around 150 million shekels for the month. Despite the proposed cut, ministry specialists have reportedly voiced objections due to the significant cost to the state budget and a lack of identified funding sources for the subsidy.