The price of gasoline in Israel is expected to drop in June by some 30 agorot per liter as a result of falling oil prices seen throughout the month of May, senior officials in the energy sector estimate.
The final price will be decreed at the end of the month, after the Fuel and Gas Administration weighs changes in the shekel-dollar exchange rate and the price of oil. A liter of self-service 95 octane gasoline is slated to be reduced to NIS 7.35 ($1.91) , compared to the current NIS 7.65 ($1.98). The full-service price is expected to be set at NIS 7.56 ($1.97) per liter.
- Gasoline prices to drop by 1.8%
The price reduction would be the second in two months. At the beginning of May, the price of gasoline was reduced by 15 agorot per liter, a development that many in the energy sector attribute to easing tensions between the West and Iran.
Despite the encouraging news, a tax credit of 15 agorot per liter issued by Prime Minister Benjamin Netanyahu in March is due to expire within a month. This marked the third tax credit given by the state in 2012; after a 40 agorot per liter price hike was nixed in February, Netanyahu decided on an additional discount of 10 agorot per liter. The additional discount of 15 agorot per liter is expected to create a NIS 300 million ($78 million) hole in the Treasury's annual revenue, and the government is not expected to hasten to extend the tax credit.
Meanwhile, the price committees of the finance and energy ministries are due to decide in June the fate of a plan to lower the marketing margin between Israel's energy companies. In September, it dropped by 19 agorot (some 25%), which caused heavy losses.
Two months ago, the government announced a plan to execute an additional reduction of some 3%, but the Treasury acknowledged that based on data from the companies, the plan might not go forward. Estimates in the energy market are that the government will ease the hit to the marketing margin by 4 to 6 agorot.