Prime Minister Benjamin Netanyahu
צילום: לע"ם
Israel bows to pressure, reduces planned electricity price hike
As part of efforts to calm public protests over rising living costs, Netanyahu says electricity price hike will not reach planned 8%.
Prime Minister Benjamin Netanyahu said Wednesday that electricity prices will rise less than the planned 8 percent in the new year, in an apparent bid to quell growing frustration over the soaring cost of living in Israel.
"The price of electricity is significantly lower than in Europe and I tell you that it will not rise 8 percent," Netanyahu told a business conference. "I do not know how much it will rise but a few percent in the worst case."
Prime Minister Benjamin Netanyahu (צילום: AP)
The price of electricity was set to rise as much as 8 percent on Jan. 1, while a host of other expenses —from food to water to municipal taxes—are also supposed to go up in 2019.
With Israel heading into an election year, the rise in living costs has touched a nerve with the public, bringing back memories of huge protests in 2011.
A new wave of protests has begun, with demonstrators sporting the yellow vests worn by protesters in France.
Netanyahu said electricity costs have dropped 15 percent since 2013, after the Tamar natural gas field opened off Israel's coast. He said the larger Leviathan gas field, slated to start production in a year, would lower electricity rates further.
Ram Shefa, one of the organizers of recent protests against rising living costs, said the plan to raise electricity rates meant Israel's gas production was only benefiting the owners of the gas fields, Noble Energy and Delek Group.
Assaf Eilat, chairman of state-run Electric Corp, told the Knesset's economics committee on Tuesday that the average electricity hike would be about 7 percent.
"Even after the rise, the price of electricity in the last five years has fallen 10 percent," Eilat said.
The high cost of living sparked mass protests in 2011 and significantly impacted the 2012 general election, with candidates promising to lower the cost of basic items.
Osem, Israel's third-largest food maker which is owned by Nestle, said Wednesday it will postpone a 4.5 percent price hike, following public pressure and a request by Finance Minister Moshe Kahlon.
Osem said in a statement that Kahlon is examining the cancellation of tariffs on a series of raw materials used by the company for its production in Israel.
"It's only the start," Shefa said, adding there would be protests targeting other foodmakers and plans for a large demonstration in Tel Aviv on Saturday night.
