(photo credit: Associated Press)
It must mean a great deal when Knesset members echo and even amplify the outcry
of regular folks. Thus when MKs last week urged Prime Minister Binyamin
Netanyahu to personally intervene and reconsider recent excise tax hikes on
gasoline, they must be perceived as responding to an irresistible groundswell of
This impression is further reinforced by the fact that the
Knesset Economics Committee has called for a parliamentary commission of inquiry
to probe the entire issue of fuel prices here.
The fact that we pay more
for filling up the tank than most anywhere in the Western world is obvious to
ordinary Israelis. The price of gasoline in Israel, if calculated in American
terms, is one of the highest in the world – about $8 per gallon.
bad also by European standards. Indeed, our intuitions have of late received
empirical backing from the Knesset Research Center, which was commissioned by
the Economics Committee to collect and process comparative-price data. The
bottom line was that last December we shelled out 25 percent more per liter of
gasoline than was the average in 15 Western European countries. The gap has
widened since, reaching about 30% this month due to the recent excise increases.
And gasoline prices are slated for another increase in February.
even before excises were raised, Israelis were taxed 18% more per liter than
their European counterparts. If we look further back, the picture gets bleaker.
Gasoline prices are 53% more expensive here today than they were in 2005 (versus
a 38% increase in EU states) and diesel fuel is up by 97% for that same
time-frame. At this point it’s instructive to recall that crude oil prices
climbed by less than 20% in the past year and remain only half of what they were
a couple of years back.
Also contributing to the outrage is the fact that
marketing profit margins here are nearly double what gas companies charge in
Europe. This, coupled with excessive taxation, keeps our fuel prices
disproportionately high. It serves everyone but the consumer. Profits enrich
corporations while fuel excises play a cardinal role in the government’s
The Treasury’s additional justification for
higher gasoline prices, as contributing to environmental protection by forcing
the citizenry to resort to public transport, rings particularly hollow. For one
thing, bus and cab fares have soared concomitantly with the excise hikes. Recent
demonstrations, especially in Tel Aviv, served to show quite unambiguously that
the public isn’t falling for lame excuses.
THIS HAS helped the message
get through to the very MKs who ratified the 2011-12 state budget (and with it
the excise hikes) last month. The Knesset Finance Committee specifically
approved the higher gasoline taxes two weeks ago. Now however, parliamentary
sentiment seems shifting, and that in itself is a good thing, much as we may
scoff, understandably, at the populist vicissitudes of our
Even if their motivations are less than entirely righteous
and sincere, it is encouraging to realize that they are listening to the vox
populi. Alleviating our frustration at the gas pump has become a cause célèbre
that cuts across party lines.
The upshot is that our lawmakers have
pledged to somehow rectify the situation and bring prices down. We have no way
of predicting whether they’ll succeed. Odds are that they won’t be able to turn
the hands of the clock back and return us to some phase of the status quo ante.
But they are more likely, at least, to impact future governmental alacrity to
raise fuel prices as a means to balancing the state budget. That facile solution
may become a little less expedient a measure.
Perhaps the most hopeful
sign of all, though, is that the Treasury even bothered to reply to the gasoline
price squawk. It is not often that the Finance Ministry reacts to anti-tax
Its environmental and fiscal pretexts may be preposterous and
unacceptable, but they at least prove that the men from the ministry are feeling
the pressure – which in itself is a modicum of success that warrants mild