Israel to Lower Fuel Prices by 0.5 Shekels Starting October 5
Translated & summarized from Vesty by baba
The story in 5 lines · by baba
- Gasoline prices in Israel will drop to 7.77 shekels per liter on October 5.
- The price reduction is set for one month only.
- This follows a record high price of 8.27 shekels per liter on October 1.
- The government is reducing the excise tax by 50 agorot.
- The one-month reduction is estimated to cost the state budget 150 million shekels.
Starting October 5, the price of gasoline in Israel will decrease by 0.5 shekels, reaching 7.77 shekels per liter at self-service gas stations. This reduced price, however, will only be in effect for one month. The Ministry of Finance announced that its legal advisor found no obstacles to signing the order for the price reduction for the upcoming month. The government's legal advisor, Gali Baharav-Miara, also confirmed there were no impediments.
This price drop follows a significant increase on October 1, when gasoline rose by 52 agorot to a record 8.27 shekels per liter. This occurred despite a previous 0.5 shekel excise tax reduction by the Ministry of Finance in September aimed at curbing sharp price hikes. Without the new reduction, a liter of fuel would have cost 8.77 shekels.
The Ministry of Finance stated that the order to reduce the excise tax by 50 agorot for one month would take effect upon signing, with prices updating at midnight between Sunday and Monday. The cost of the previous subsidy, implemented by Minister of Finance Bezalel Smotrich in September to offset fuel price increases, was estimated at approximately 310 million shekels over two months. The current one-month reduction is projected to cost around 150 million shekels.
Ministry of Finance specialists had previously objected to an additional excise tax reduction due to its high cost to the state budget and lack of funding sources, warning the minister of the budgetary consequences. The Ministry of Energy attributed the earlier significant price increase to a roughly 6% rise in international market prices, only partially offset by a 3% decrease in the dollar's exchange rate.
The historical peak price for 95-octane gasoline was 8.25 shekels per liter in September 2012. At that time, Prime Minister Benjamin Netanyahu first proposed a fuel excise tax reduction. Later, the tax discount was canceled, but in the summer of 2022, then-Minister of Finance Avigdor Lieberman reinstated it, leading to prices exceeding 8 shekels again, prompting government intervention to temporarily lower the excise rate.
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