Israel Subsidizes Fuel Prices to Prevent Sharp Increase
Translated & summarized from Globes by baba
Israeli Finance Minister Bezalel Smotrich signed an order to subsidize fuel excise taxes, keeping the price of gasoline at 7.85 shekels per liter and preventing an increase to 8.35 shekels. The subsidy, effective immediately and lasting until the end of November, is a response to historically high global oil prices and refining costs. The government expects to lose 136 million shekels in tax revenue from this measure, with potential for a significant price hike if the subsidy is not extended.
The story in 5 lines · by baba
- Finance Minister Bezalel Smotrich ordered a fuel subsidy to prevent a price increase.
- The price of gasoline will remain at 7.85 shekels per liter due to the subsidy.
- The subsidy is in effect for 26 days, until the end of November.
- High global oil prices and refining costs are contributing to the current fuel price.
- The government expects to lose 136 million shekels in tax revenue from the subsidy.
Israeli Finance Minister Bezalel Smotrich has signed an order to subsidize fuel excise taxes, preventing a significant price hike for drivers. Effective immediately, the price per liter of gasoline will be set at 7.85 shekels. Without the subsidy, the price was slated to rise to 8.35 shekels on November 5. The state will cover the difference from its budget.
The order, published late Thursday night and effective Sunday, will remain in place for 26 days, until the end of November. This measure aims to mitigate the impact of historically high fuel prices, driven by a combination of elevated global oil prices and a substantial refining margin.
Global oil prices are currently around $115 per barrel of Brent crude, influenced by geopolitical tensions, including Iran's actions in the Strait of Hormuz and Ukrainian attacks on Russian energy infrastructure. These factors have increased the cost and risk associated with oil transport and refining.
The government's revenue loss from the reduced excise and blue taxes is estimated at 136 million shekels for this period. This adds to previous revenue losses from similar subsidies, bringing the total for the last three months to approximately 593 million shekels.
Should the subsidy not be extended beyond November, fuel prices are expected to increase by about 1.50 shekels per liter.
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