Electricity prices set to rise nearly 9%

Public Utilities Authority must approve agreement, which will raise prices starting February.

electricity plug (photo credit: Rennett Stowe)
electricity plug
(photo credit: Rennett Stowe)
Electricity rates will rise by nearly nine percent in February, if an agreement struck between representatives of the Israel Electric Corporation and the Finance Ministry on Tuesday is approved by the Public Utilities Authority.
The IEC announced last month that electricity prices would rise by 30% in 2012 on the back of financial troubles caused by the suspension of natural gas deliveries from Egypt. Tuesday’s agreement was reached after the Finance Ministry proposed staggering the rate hike over three stages to avoid a large one-time rate hike.
Finance Minister Yuval Steinitz has instructed his personnel to find a solution that will prevent the dramatic rate hike. The IEC’s financial situation is being examined, the Finance Ministry said on Tuesday.
But opposition members of Knesset blasted the government over the increase, saying prices had risen 25% since Prime Minister Binyamin Netanyahu made a commitment last summer to ease the cost of living.
“The Netanyahu government is the government of taxes,” MK Shlomo Molla (Kadima) said.
“Netanyahu said he understood the socioeconomic protest, but in the same breath his government raises taxes that harm the lower and middle classes. The government is showing contempt for its citizens, the public is collapsing and the government is laughing.”
Also on Tuesday, Energy and Water Ministry director-general Shaul Tzemach told the National Planning and Building Commission the IEC was buying unprecedented quantities of diesel to offset the loss of Egyptian gas, Globes reported.
“We will pay an extra NIS 10 billion in 2012 for fuel for electricity, compared with last year,” Tzemach said. “Natural gas costs a fifth of diesel, before the excise, and a ninth of the price of diesel, including the excise.”