What goes into the price of a liter of gas?

Excise tax has risen "slowly" over the past few years, in line with the development of the CPI, and is updated each three months, said EcoEnergy CEO Amit Mor.

By DANIEL KENNEMER
April 25, 2006 07:57
1 minute read.

 
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In addition to the basic price of the fuel, gasoline prices include excise tax (currently about NIS 2.23 per liter) and marketing costs. The 16.5-percent value added tax (VAT) and 11 agorot for full-service pumping is then added to this subtotal to get the final consumer price per liter of gasoline listed and regulated by the Ministry of National Infrastructures. Individual retailers then have the discretion to grant a minimum discount of 11 agorot to their self-service price, and have been known to concede up to 20 or 30 agorot per liter, depending on how much they want to cut into their 60-agora-per-liter revenue margin (which the ministry includes in the price as marketing costs) and save on manpower to compete for drivers' patronage. Assuming an 11-agora discount, about 35.4% of the self-service price of a liter of gasoline went to the gross cost of the fuel itself in August 2005, 39.7% went to the excise tax, 10.4% to marketing costs, and 14.5% to VAT, according to the National Infrastructure Ministry's most recent calculation. Excise tax has risen "slowly" over the past few years, in line with the development of the consumer inflation index (CPI), and is updated each three months, said EcoEnergy CEO Amit Mor. Diesel prices are published monthly by the ministry as well, but not regulated. About 70% of the gasoline sold in Israeli pumping stations comes from Bazan (Oil Refineries Ltd.), the state supplier currently undergoing division and privatization, which imports crude oil primarily from former Soviet republics, the Ministry said. The remaining 30% of the gasoline is imported by the fuel retailers themselves from a variety of sources.

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