'Gov’t must try to lower price of gasoline'

Knesset Economics Committee says 95-octane gasoline prices soaring.

By NADAV SHEMER
March 5, 2012 22:54
1 minute read.
Gas station

Gas station 521. (photo credit: Marc Israel Sellem)

 
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The Knesset Economics Committee called Monday for the government to make more of an effort to combat the soaring price of 95-octane gasoline, which hit a record NIS 7.95 per liter on Thursday.

The Energy and Water Ministry initially increased the maximum price to NIS 8.05 on the back of soaring global oil prices and the depreciation of the shekel against the dollar. However, Prime Minister Binyamin Netanyahu issued a last-minute order to reduce the excise from NIS 2.96 to NIS 2.86.

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Israel’s gasoline excise is 10 agorot higher than the European average when taking into account purchasing power, according to a Knesset Research and Information Center report commissioned by Economics Committee chairman Carmel Shama-Hacohen (Likud) and presented at Monday’s meeting.

There was no reason why prices in Israel should be higher than the European average, Shama-Hacohen said at the meeting. He urged the state to ensure basic products remain affordable, even if this means missing out on tax revenues.

Shama-Hacohen applauded steps already taken by the government, such as lowering the excise and reducing the marketing margin last year, but added: “It must be understood that the state cannot supply cheap gasoline in the long term, but every effort must be made to ease the public burden.”

Eran Ya’acov, deputy director-general of finance and development at the Israel Tax Authority, told the committee that in addition to bringing NIS 15 billion into state coffers every year, gasoline taxes have another purpose: Gasoline pollutes, creates congestion on the roads and causes illness and other problems that cannot be treated without excise revenues.

Meanwhile, the Energy and Water Ministry published data on Monday showing that consumption of 95- octane gasoline in Israel and the Palestinian Authority rose 10 percent yearon- year to 231 million tons this January.

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This was despite gasoline costing NIS 7.44 at Israeli gas stations in January, 17 agorot higher than in the same month the previous year.

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