Oil prices have fallen 8% over the past month but the Ministry of Finance has cut the excise exemption from NIS 1 per liter to NIS 0.33.
The maximum price of government price controlled 95 octane gasoline at self-service pumps in Israel in December will rise by NIS 0.39 per liter on Wednesday at midnight to NIS 6.85 per liter, the Ministry of National Infrastructures, Energy and Water Resources has announced. The charge for receiving full-service at pumps from gas station attendants will remain NIS 0.21.
The rise in price was supposed to be steeper but at the last moment the Ministry of Finance found a budgetary source of NIS 100 million in dividends from government companies, so that it could agree not to restore the full NIS 1 per liter in excise tax cut earlier in the year. Instead only a NIS 0.33 cut in excise will remain in effect. The government had already spent NIS 2 billion by cutting excise by NIS 1 per liter in order to help quell inflation.
Were it not for the excise hike, gasoline prices would have fallen this month as the price of Brent crude has declined 8% over the past month and the shekel has strengthened slightly. Brent crude has now returned to the price it was before the outbreak of the Russia-Ukraine war.
The incoming government will find it difficult to extend the NIS 0.33 excise cut but Prime Minister elect Benjamin Netanyahu promised during his election campaign that he would not increase prices of fuel, electricity, water and municipal rates.
Published by Globes, Israel business news – en.globes.co.il – on November 30, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
Gasoline credit: Shutterstock