MK Erdan wants smaller electricity price hike

Environmental protection minister asks to slash electricity price increase expected due to loss of Egyptian gas supply.

By
December 25, 2011 01:41
1 minute read.
Civil Defense Minister Gilad Erdan

Erdan 311. (photo credit: Steve Linde)

Environmental Protection Minister Gilad Erdan appealed to Finance Minister Yuval Steinitz in hopes that he would slash the dramatic electricity price increase that is expected to occur in response to the loss of a regular Egyptian gas supply.

Due to the cease in reliable flow of this natural gas outlet, the Electricity Authority recently announced it plans to raise the price of electricity by 30 percent. In response, Erdan wrote a letter to Steinitz suggesting he consider nixing the collection of excess taxes for 2012, as diesel fuel consumption is expected to increase significantly this year, the Environment Ministry said. Diesel fuel is one of the main alternative sources currently used by the Israel Electric Corporation to power the country when the natural gas supply is insufficient.

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With an increased consumption of the resource, excess tax collection – which would thereby cause a rise in tariff rates – would not be necessary to satisfy budgetary needs, according to the ministry.

“You could reduce the tariff increase by a substantial rate – if the Finance Ministry would decide to limit the extent of tax collections on diesel fuel from the production of electricity to the level that it was in 2010,” Erdan told Steinitz. “In this way, it will be possible to ease the expected burden on electricity consumption, as well as the cash flow distress in which the IEC finds itself.”


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