Gas station 521.
(photo credit: Marc Israel Sellem)
The maximum price of fullservice 95 octane gasoline will hit a record NIS 7.95
Thursday, even after Prime Minister Binyamin Netanyahu’s last-minute
intervention reduced the price increase by 10 agorot.
The Energy and
Water Ministry initially set the price at NIS 8.05 – an increase of 38 agorot –
on the back of the shekel’s depreciation against the dollar and a spike in
global oil prices. It determines the maximum price each month according to five
components: the cost of oil; an excise tax (currently NIS 2.96); marketing
margins; value-added tax (VAT) on the first three components; plus an added
full-service fee (currently NIS 0.21).
Netanyahu’s intervention, which
came just minutes before the main evening news broadcasts at 8 p.m., ensured the
price did not pass the NIS 8 threshold – seen as a psychological threshold for
consumers. His office said in a press release that the Finance Ministry will
formulate proposals in the coming months to solve the gasoline issue.
Wednesday afternoon, MKs helped defeat a proposal by MK Meir Sheetrit (Kadima)
to remove the VAT component from the price of gasoline. Netanyahu stepped out of
the Knesset during that vote, but returned hours later with his own
“The government is not prepared to listen to the public,”
Sheetrit said during the Knesset’s debate on his bill.
“A gasoline price
increase will cause a general price increase, and the lower classes will be the
first hit. What the Treasury does not understand is that a fuel crisis will
expose the state to inflation, which will cost the economy hundreds of millions
of shekels and lead to economic crisis.”
Earlier in the day, Energy and
Water Minister Uzi Landau told Army Radio that the price of gasoline was
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Pointing out that taxes account for more than 50 percent of
the price, he urged his government counterparts to absorb the price
“When global oil prices rise, so too does the cost to the
consumer,” Landau said.
“But it is important to remember that for many
Israelis a car is not a luxury item, but rather a work tool for all intents and
A Kadima spokesman said that the prime minister had bowed to
pressure but could not buy the public for 10 agorot. Earlier, Kadima leader
Tzipi Livni called the price increase “a pointless scandal,” and said the time
had come for the government to put the general good of the public
Labor leader Shelly Yacimovich said Netanyahu had deceived the
public in an embarrassing manner, “like a salesman whose prices always end with
She added: “The excessive price of gasoline is a result mainly of
double taxation, indirect and unequal, which turns the middle class into a
production plant for tax revenues.”
Doron Cohen, the Finance Ministry’s
acting director-general, ruled out lowering the VAT or gasoline excise tax on
Tuesday, saying that both had already decreased proportionally to the state
budget over the past few years.
Speaking at a conference in Tel Aviv,
Cohen said the Treasury could not give up on much-needed taxation revenues. It
would be unacceptable to cut the budgets of other government departments in
order to reduce the price of gasoline, he added.
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