PM: Ministry cuts guarantee cheaper fuel over Pessah

Netanyahu asks for cuts as cabinet approves proposal to reduce government employee wages by two percent.

April 4, 2012 16:37
2 minute read.
Gas prices are going up

Gas prices. (photo credit: Marc Israel Sellem/The Jerusalem Post)


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Prime Minister Binyamin Netanyahu said Wednesday that fresh ministerial budget cuts were a necessary step toward providing citizens with cheaper travel costs during Passover.

Cooperation from all ministers is necessary “so that Israelis may enjoy lower fuel prices in order to travel around the country over the Passover holiday, on pleasant highways, to the parks and reserves,” Netanyahu said.

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He spoke as the cabinet approved a Treasury proposal to reduce total wages of government ministry and agency personnel by 2 percent. The cabinet also instructed ministries to lower incentive pay as per a 2005 agreement with the Histadrut labor federation.

Netanyahu has intervened in three successive months to reduce the size of planned gasoline increases. On Saturday night he ordered that the gasoline excise be reduced once again, bringing the cost of full service 95 octane to NIS 8 per liter instead of the planned NIS 8.15. But he explained again Wednesday that there was only so much the government could do to ease the public burden.

“The government does not control fuel prices. Even the major powers do not control fuel prices. This is a fluctuating global market,” Netanyahu said at the cabinet meeting. “We have witnessed a constant upward movement in the past year as a result of the sanctions on Iran and other factors. We are trying to moderate the increases... but, as usual, this is not a free lunch and, therefore, from a budgetary perspective, we need to cover the gap that results from lowering prices.”

The prime minister said all government ministries could boost efficiency, saying that none – his own office included – had exhausted all options. He added: “Everyone says, ‘I am more efficient; make the others streamline their offices, exempt me.’ I know this is difficult for ministers and ministries, but nevertheless I ask for your cooperation.”

Shas ministers voted against the ministerial budget cut, which party leader Eli Yishai said would turn civil servants into holiday victims. “We will demand the promotion of Construction and Housing Ministry construction programs and Interior Ministry efforts against illegal infiltrators with one hand,” he said, “while with the other support an attack on the same staff who work on those programs.”

The Treasury presented data to the cabinet showing that taxation accounts for only 49% of the cost of 95 octane gasoline to Israeli consumers in April, while it accounts for an average 55% of a liter in the European Union. The UK has the highest taxation component among the 27 EU member states, where it accounts for 58% of a liter, while at the other end taxation accounts for only 42% of a liter in Cyprus.

The Energy and Water Ministry sets the maximum price of gasoline each month according to five components: the cost of oil (NIS 3.37 per liter in April); excise tax (NIS 2.74); marketing margins (NIS 0.59); value added tax on the first three components (NIS 1.07, or 16%); plus a full service fee (NIS 0.21).

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