Fuel Prices Surge in Israel After Subsidy Cut
Translated & summarized from Ice by baba
The price of 95-octane gasoline in Israel has increased by NIS 0.50 to NIS 7.85 per liter due to the expiration of a government subsidy. Finance Minister Bezalel Smotrich implemented a partial tax reduction, lowering the price by NIS 0.50 instead of the full NIS 1.00 subsidy. This temporary measure, valid for 26 days, will cost the state NIS 136 million and drivers an extra NIS 25 per 50-liter tank.
The story in 6 lines · by baba
- Gasoline prices in Israel rose by NIS 0.50 to NIS 7.85 per liter starting Thursday.
- The price increase follows the expiration of a NIS 1.00 per liter government subsidy.
- Finance Minister Bezalel Smotrich enacted a new order reducing the excise tax by NIS 0.50.
- This temporary measure is valid for 26 days, through the end of November.
- The tax reduction is expected to cost the state NIS 136 million in lost revenue.
- A 50-liter fuel tank will now cost an additional NIS 25.
Drivers in Israel are facing a significant increase in fuel costs, with the price of a liter of 95-octane gasoline at self-service stations rising to NIS 7.85. This marks an increase of NIS 0.50 per liter from the beginning of November. The price hike is attributed to the expiration of a previous government order that provided a substantial subsidy, effectively reducing the price by NIS 1.00 per liter.
To mitigate a severe consumer shock, Finance Minister Bezalel Smotrich signed a new order late Wednesday, reducing the excise tax on gasoline by NIS 0.50 per liter. This intervention halves the previous government subsidy, meaning drivers will now absorb the full impact of global oil price fluctuations and exchange rate changes, albeit at a reduced rate compared to what would have occurred without the new order. Had Smotrich not intervened, the price would have reached NIS 8.25 per liter.
The Ministry of Finance stated that the measure is intended to soften the blow to drivers and prevent immediate economic disruption, but emphasized it is a temporary solution. The new order is valid for only 26 days, through the end of November. Consequently, refueling a typical 50-liter tank will cost an additional NIS 25 starting Thursday.
As the end of November approaches, attention will turn back to the Finance Ministry to see if the temporary subsidy will be extended. Without further intervention, drivers may face another price increase in December, potentially pushing the price of gasoline closer to NIS 8.00 per liter. The tax reduction is estimated to cost the state approximately NIS 136 million in lost tax revenue.
