The Finance Ministry said Thursday that its legal advisers see no obstacle to Finance Minister Bezalel Smotrich approving another temporary cut in gasoline taxes, as prices at the pump surged to an all-time high despite an existing government discount.
The maximum price of self-service 95-octane gasoline rose at midnight to 8.27 shekels per liter, up 52 agorot from September and surpassing the previous record of 8.25 shekels. Full-service fueling carries an additional charge of 26 agorot per liter, including VAT.
(Photo: Alexi J. Rosenfeld/Getty Images)
Smotrich intends to cut the price by another 50 agorot per liter for one month, subject to public comments and a legal opinion from the attorney general, the Finance Ministry said. The measure would come on top of a 50-agorot reduction approved last month.
The latest proposed discount is expected to cost the state about 150 million shekels for the month. Smotrich’s previous decision to subsidize higher fuel prices was estimated to cost about 310 million shekels over two months.
Professional officials in the government oppose the additional reduction, warning that Israel’s fiscal position is strained and that cutting taxes now would ultimately require either additional borrowing or future tax increases.
The previous fuel-price record was reached at the beginning of September, when gasoline climbed to 8.25 shekels per liter, matching the previous high set in September 2012. After Smotrich received legal approval to reduce the excise tax during the election period, the price was temporarily cut by 50 agorot to 7.75 shekels per liter.
The Fuel and Gas Administration said the latest increase came despite that excise-tax reduction, which remains in effect through the end of October.
Officials attributed the increase largely to a roughly 13% rise in gasoline prices on international markets amid higher global oil prices and continuing concerns over oil supplies and stability in global energy markets. A roughly 3% strengthening of the U.S. dollar also pushed Israeli fuel prices higher.
In Eilat, where VAT does not apply, the maximum self-service price rose by 44 agorot to 7.01 shekels per liter. The full-service surcharge there remains 22 agorot per liter.