PMO, Shama-Cohen seek to stem rising gas prices

Livni calls scheduled increase a "pointless scandal"; Yacimovich says high gas tax is unfair, targets the middle class.

February 29, 2012 10:22
2 minute read.
Gasoline prices [illustrative photo]

Gasoline prices gas tax 311. (photo credit: Marc Israel Sellem)


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PMO director-general attorney Harel Locker was expected to hold a meeting with Knesset Economic Affairs Committee chairman Carmel Shama-Cohen Wednesday morning to discuss possible ways to prevent a scheduled increase in the price of gasoline.

The price of gasoline is expected to hit a record high of around NIS 7.99 per liter overnight Wednesday, on the back of a sharp rise in global oil prices amid tensions over Iran.

Opposition leader Tzipi Livni on Wednesday called the increase a pointless scandal.

Taxes on gasoline, the Kadima leader said, "are merely taxes levied on the public, thereby continuing to burden it." Prime Minister Binyamin Netanyahu, she added, must lower gasoline taxes immediately.

"The time has come for this government's priorities to change. The time has come for it to put the general public good first," Livni said.

Labor party leader Shelly Yacimovich on Wednesday called on Netanyahu to stop the price of gasoline from reaching record levels.

"Netanyahu knows that well that half of the price of gasoline is not derived from global competition and is simply indirect taxation," Yacimovich said, calling the gas tax unfair and saying it targets the middle class. Israel's taxation policy, she said, is distorted and contributes to increasing socioeconomic gaps in the country.

Finance Ministry acting director-general Doron Cohen on Tuesday ruled out lowering the gasoline excise or value-added tax, saying that both had already decreased in proportion to the state budget over the past few years.

The price of fuel at gas stations is determined by five components: the cost of oil; the excise tax, which currently stands at NIS 2.96 per liter; marketing margins; 16 percent VAT on the three aforementioned components; and an added flat fee for full service that now stands at NIS 0.21 per liter. For February, the maximum price of 95 Octane Unleaded is NIS 7.67.

MK Meir Sheetrit (Kadima) announced on Tuesday that he would put forward a bill to remove the VAT on gasoline, and estimated that this would reduce the overall price by around 50 agorot per liter.

“It cannot be the case that a civilized country collects one indirect tax on top of another,” Sheetrit said in reference to the excise and VAT.

“Today, taxes contribute around half of the price of gasoline. If the government is interested in collecting taxes from consumers; it should do so in a transparent manner and be prepared to face the public criticism.”

Sheetrit said he agreed to a request from MKs in December not to put forward the bill, in order to give them time to discuss the issue. But on Tuesday he said that no progress had been made, and that he would now advance the bill again, to embarrass the coalition.

An anti-government consumer campaign was also gaining steam on Tuesday night.

“Stop the gasoline price increase,” a group with more than 16,000 members, called on all citizens to turn on every electrical appliance in their home at the same time on Thursday, with the aim of causing the national electricity grid to collapse.

Nadav Shemer contributed to this report.

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