The Knesset Finance Committee approved a directive Wednesday to reduce the excise on diesel used in electricity production by 69 percent, effective until the end of the year.
Finance Minister Yuval Steinitz ordered the cut late Sunday, helping to halve a price hike by the Israel Electric Corporation hike from 20% to 10%. However, an IEC official appearing before the committee warned that the cost of electricity to the consumer could rise again on January 1.
“The IEC estimates that consumption of diesel and fuel oil for electricity production will increase in 2012, due to the suspension of Egyptian gas deliveries and to smaller deliveries from Israel’s gas reserves,” IEC fuels director Dina Biran said.
Those comments were backed by Public Utilities Authority (Electricity) Chairman Amnon Shapiro, who confirmed that the IEC’s costs had risen 20% as a result of having to use more expensive fuels to compensate for the lack of natural gas.