Fuel Prices to Drop as Government Cuts Excise Tax Despite Professional Objections
Translated & summarized from Israel Hayom by baba
The story in 5 lines · by baba
- Fuel prices in Israel will decrease by half a shekel per liter starting tonight.
- The price drop is due to an extension of an excise tax cut on fuel.
- The Finance Minister pushed for the reduction, overriding professional objections.
- The tax cut is costing the state an estimated NIS 300 million monthly.
- Recent fuel price increases were driven by global oil prices and dollar strength.
Effective midnight tonight, the price of a liter of 95-octane gasoline in Israel will decrease by half a shekel, falling to NIS 7.77. This reduction is due to a government decision to lower the excise tax on fuel for an additional month. The decision was approved by the Attorney General on Thursday, allowing Finance Minister Bezalel Smotrich to formally sign the order.
The budgetary cost of this tax reduction is approximately NIS 300 million per month. The Ministry of Finance estimates that the total loss of state revenue from this tax cut over the past two months will reach about NIS 900 million.
This latest half-shekel reduction follows a similar cut implemented last month. If no further changes occur, the excise tax on fuel will increase by a full shekel next month, potentially pushing the price of a liter of gasoline back towards NIS 9.
The recent rise in fuel prices has been attributed to two main factors: a global increase in oil prices, with Brent crude stabilizing around $100 per barrel, and a 3% strengthening of the dollar against the shekel in September.
Finance Minister Smotrich sought to implement this tax reduction, citing a precedent from 2022 when then-Finance Minister Avigdor Lieberman was permitted to reduce the excise tax for a limited period during an election campaign, despite professional opposition. This time, however, the professional echelon within the Finance Ministry strongly opposed the measure, arguing that Israel needs tax revenue to fund its war expenses. Despite this internal disagreement, the political leadership's decision prevailed, leading to the fuel price decrease.
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