Election period: Bezalel Smotrich intends to curb fuel price hikes despite opposition
The move to reduce the excise tax could cost the state treasury hundreds of millions of shekels. The Ministry of Finance is awaiting the Attorney General's decision on the feasibility of the move or whether it will be disqualified on the grounds of 'election economics'.
Finance Minister Bezalel Smotrich has ordered the preparation of an order to reduce the excise tax on fuel, aiming to soften the expected increase in gasoline prices. The plan under consideration is to reduce the price for the consumer by 0.5 shekels per liter, at a cost of approximately 300 million shekels to the state treasury per month. Professional bodies within the Ministry of Finance oppose the move, and it is currently being examined whether the Attorney General will approve the measure during the election period or determine that it constitutes 'election economics'.
The price of gasoline is expected to rise by 16 agorot to 8.25 shekels per liter. Notably, 5 agorot of this increase stem from an upward update of the excise tax component in accordance with the periodic index update.
The announcement comes hours after the Ministry of Energy stated that at midnight between Monday and Tuesday, the maximum price of a liter of 95-octane gasoline for self-service will increase by 16 agorot, reaching 8.25 shekels—a level matching the record set in September 2012.
The Director of the Fuel and Gas Administration at the Ministry of Energy and Infrastructure, Bat-Sheva Abuchatzira, explained that the price hike is driven primarily by a 6% increase in gasoline prices on the international market, partially offset by a 3% decline in the dollar exchange rate.
Professional bodies in the Finance Ministry remain critical of the proposal. Estimates suggest that every 10-agorot reduction in the price per liter results in a monthly revenue loss of approximately 30 million shekels for the state treasury.
Following reports, the Finance Minister's office confirmed that Bezalel Smotrich has ordered the promotion of the excise tax reduction to mitigate price hikes caused by the global energy crisis and ongoing tensions in Iran. Professional discussions are currently underway at the Ministry of Finance to finalize the implementation mechanism, with the Minister intending to sign the order in the coming days.
