PM steps in again to reduce gas increase

Self-service liter of gas in Israel now NIS 7.79, far more than in the US, but still less than in much of Europe.

By JPOST.COM STAFF
March 31, 2012 19:50
2 minute read.
Gas station

Gas station 521. (photo credit: Marc Israel Sellem)

 
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For the third time this year, Prime Minister Binyamin Netanyahu stepped in Saturday night to reduce the size of a planned gas increase, meaning the price of gas rose at midnight by 5 agorot, instead of the planned 20 agorot hike.

The prime minister’s decision means that one liter of gas at a full-service station will now cost NIS 8 ($8.16 per gallon), and a liter of self-service gas will cost NIS 7.79 ($7.95 per gallon).

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Netanyahu intervened last month, as well as in January, to reduce the tax on gas, thereby reducing the accumulative hikes by 65 agorot per liter (66 cents per gallon).

According to a statement released by the Prime Minister’s Office, the revenue lost by the decreased tax will be made up through “efficiency” measures to be employed by each government ministry. Under the plan, ministerial staffs will be reduced by some 2 percent, as retiring employees will not be replaced.

The decision was made together at a meeting Saturday night with Finance Minister Yuval Steinitz, who – according to the Prime Minister’s Office – said the plan will ease the situation for the country’s citizens without harming the economy.

Funding the lower gas hikes through government efficiency measures is the responsible and right economic thing to do, he said.

Just prior to this announcement, Steinitz appeared on Channel 2’s Meet the Press and said Israelis would rather pay more for gasoline than deal with the threat posed by a nuclear-armed Iran.



“Gas prices are up all over the world due to sanctions on Iran,” Steinitz said. “I’m sure Israel would prefer to pay more for gas than [deal with] the threat of a nuclear Iran.”

According to government figures, even with Saturday night’s gas hikes, gas per liter in Israel is still cheaper than in the Netherlands (NIS 9.22 per liter), Britain (NIS 8.46) or Norway (NIS 10.19). However, the average wage in each of those countries is also significantly higher than in Israel.

In the US, the average price for a liter of gas is NIS 3.91.

Meanwhile, even as gas prices did not rise as much as expected at midnight, the price of electricity went up 8.3%, an increase that will significantly raise the cost of air conditioning in homes this summer.

Labor MK Isaac Herzog criticized Netanyahu on Saturday evening for his last-minute intervention to reduce the size of a gas price increase, saying the move would not distract from the prime minister’s failure to address the country’s social ills.

“Netanyahu’s zigzagging will not cover up his and his government’s most serious failure: expanding [social] disparities and tightening the grip on Israeli citizens,” Herzog wrote on his Facebook page.

Netanyahu could have reduced taxes on fuel until global gas prices became more moderate again, Herzog said. “His numbers game is a practice in self-righteousness and hypocrisy.”

Jerusalem Post staff contributed to this report.

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