Israel to Lower Fuel Prices by 50 Agorot Amid Election Season

The price of gasoline in Israel will decrease by 50 agorot per liter starting Sunday night, bringing the cost down to 7.77 shekels. This reduction is the result of a decree signed by Finance Minister Bezalel Smotrich to lower the fuel excise tax to 2.73 shekels per liter. The move was approved by Attorney General Gali Baharav-Miara, who did not block it despite occurring during an election period, citing precedent from previous administrations.

This is the second consecutive reduction initiated by Smotrich. In early September, he lowered the excise tax by 50 agorot. Without these two reductions, the price of gasoline would currently be approximately 8.77 shekels per liter. The current price cut is set to be in effect for one month, until the end of October.

The budgetary cost of these measures is significant. The previous reduction cost the state approximately 310 million shekels over two months, and the current cut is expected to add another 150 million shekels. Together, the two reductions represent an accumulated loss of revenue of about half a billion shekels for the state.

Professional officials within the Ministry of Finance have expressed opposition to the measure, warning of potential damage to the state budget. They argue that the tax system is not the appropriate tool for addressing price increases, drawing a parallel to past proposals to reduce VAT on apartments as a solution for rising housing costs.

Minister Smotrich justified the reduction by stating his intention to stimulate growth and maintain price stability. He also referenced the precedent set by former Finance Minister Avigdor Lieberman, who previously reduced the fuel excise tax to curb rising prices.