Following the disruptions in the supply of natural gas from Egypt to Israel, which began in February 2011, Israel has been forced to use diesel fuel for electricity production.
The use of diesel oil is significantly more expensive than the use of natural gas, increasing the cost of electricity production as well as electric rates.
In order to ease the price hike, Steinitz decided to reduce the excise and sales taxes imposed on diesel fuel by 69%. The temporary provision will apply retroactively to the entire period in which the gas supply from Egypt was disrupted – from February 1 to December 31, 2011.
According to Steinitz, "Although the rise in fuel prices all over the world and the attacks on the Egyptian gas pipeline require a temporary increase in electric rates, I decided to ensure that the temporary price would not exceed its original level at the start of 2010."
Protest leaders: Hike a slap in the face
News of the expected price hike enraged the leaders of the social protest. Amir Adler, one of the tent protest leaders, told Ynet: "Raising the electricity prices now, after everything we've been doing here, after we've been told that they're listening to us, is a slap in the face and an admission that they don't understand us at all.
"This is a huge offense against the public, for whom this increment is just another unnecessary burden."
Roee Neuman, the tent protest spokesman, added: "Once again the Israeli government and its leader, Benjamin Netanyahu, prove that they are completely indifferent to the citizens' distress. This obtuseness is directed at all levels of society."
There were also those who warned of even bigger protests. According to Attorney Barak Cohen, one of the protest leaders, "The way the government interprets what is happening across the country will end badly. I have no more expectations from them, I just hope the public will understand that we must continue taking to the streets in response to such actions."
Ofer Eini, chairman of the Histadrut Labor Federation, slammed Finance Minister Yuval Steinitz's decision as insensitive to the public.
"There's no rush – this move could have been postponed," he said. "After all, who will pay the price for this? The consumer is being 'screwed' twice: First he'll pay more for electricity and then he'll pay more for supermarket products.
"Because you know what will happen? The machines producing the products at the factories use electricity, electricity will be more expensive and the production cost will rise, the companies will make the consumers pay for the price hikes, so everything will cost more.
"At the height of a protest against the cost of living – this is simply insensitive," he concluded.
Kadima party members also slammed the decision, saying it was "proof that Netanyahu disregards the public's outcry."
"In his two-and-a-half years in office, Netanyahu has raised the taxes on fuel, water, public transport, property tax and electricity, and has critically harmed the middleclass and the weaker sectors," said the party spokesperson.
Yael Darel, Boaz Fyler and Attila Somfalvi contributed to this report
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