Israel to Halve Fuel Tax Cut, Gas Prices to Rise Next Week
Translated & summarized from Kipa by baba
Israel's Ministry of Finance will reduce the fuel tax discount from 1 shekel to 0.5 shekels per liter starting next week, leading to a price increase from 7.35 to 7.85 shekels per liter. This measure aims to keep prices stable despite market fluctuations, but will cost the state treasury an estimated 593 million shekels over recent months. The new order awaits the Finance Minister's signature.
The story in 5 lines · by baba
- Israel's fuel tax discount will be halved to 0.5 shekels per liter starting next week.
- Gasoline prices are set to rise by 50 agorot per liter, reaching 7.85 shekels.
- The change replaces a 1 shekel per liter discount expiring November 5.
- The tax reduction is expected to cost the state treasury 136 million shekels.
- Total cost of recent fuel tax breaks to the state is nearly 600 million shekels.
Drivers in Israel will soon see a significant reduction in the fuel tax discount they have been receiving. The Ministry of Finance has issued a draft order that will replace the current 1 shekel per liter reduction, set to expire on November 5, with a new discount of only half a shekel per liter. This change means that the price of gasoline, currently at 7.35 shekels per liter, is expected to increase to 7.85 shekels per liter starting midnight between Wednesday and Thursday of next week. Consequently, despite the extension of the benefit, drivers will pay an additional 50 agorot for every liter of fuel.
The current discount was implemented due to a sharp rise in fuel prices, aiming to prevent a substantial increase at the pump. Without any extension, gasoline prices were projected to reach an all-time high of 8.35 shekels per liter on November 5. The Ministry of Finance explains that while a slight decrease in fuel prices is anticipated in November, maintaining current price levels without further tax intervention would be impossible. The new, reduced discount aims to keep gasoline prices as close as possible to their recent levels.
However, this measure comes at a considerable cost to the state treasury. The new reduction is expected to result in a loss of 136 million shekels in tax revenue. This adds to the 175 million shekels lost due to the previous temporary order and 282 million shekels from the order preceding it. In total, the three tax reductions on fuel over recent months are estimated to cost the state approximately 593 million shekels. The new order still requires the signature of the Minister of Finance, Bezalel Smotrich, but no opposition is currently expected.
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