Knesset holds special session on rising fuel costs

Kadima MKs slam PM "Draconian" policy on gas taxes.

By REBECCA ANNA STOIL
May 12, 2011 02:36
2 minute read.
MK Meir Sheetrit

MK Meir Sheetrit 311 Ariel. (photo credit: Ariel Jerozolimski)

 
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Less than a week before the Knesset officially begins its Summer Session, Kadima fired what sounded like the session’s opening shots Wednesday, attacking the government’s financial policy during a special plenum session.

“For 13 years, from 1996 until 2009, no government raised gas prices. No government saw fuel as a way to raise capital at the public’s expense – a tool that can be played with – because they knew that the moment you raise fuel prices, there is a rise in prices across the economy,” complained Yoel Hasson (Kadima) during the recess session.

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“This is not a matter of coalition and opposition, this is something that the Knesset as a whole should tell the prime minister – that his policy on gas taxes is unacceptable, is too Draconian, is a sentence that the public cannot bear,” he continued, reminding his fellow MKs that Israel started the year with tax surpluses.

He also emphasized that despite the fact that average gas prices per barrel had dropped from $147 in 2008 to $105 today, gas was 20 percent cheaper for Israelis in 2008. “The simple reason is that taxes on fuel now constitute almost 60% of the total cost of gas at the pump,” Hasson said.

MK Meir Sheetrit (Kadima) announced Wednesday that in the coming days, he intended to submit legislation that would cancel the value-added tax that is applied to the fuel taxes.

Sheetrit complained that the rising fuel costs mostly harmed the middle and lower classes. Value-added tax, Sheetrit said, is charged twice in calculating gas fees: once on the price of the fuel itself, and once on the fuel tax.

“It is illogical that Israelis who already pay a very high price on fuel are charged a tax on the tax itself,” he explained.

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Hasson has also submitted a bill to combat fuel costs, proposing that the maximum tax that the Treasury can place on gas cannot exceed 30% of the total price at the pump. Any additional increase in taxes beyond the 30% level would require special permission from the Finance Committee.

Israel currently ranks 12th in the world in fuel prices, trailing behind western European nations, with costs per-liter coming in at twice the average gas price in the US.

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