Fuel price will jump in December if excise cut extended

The temporary cut in excise duty on fuel introduced by the outgoing government will apparently be extended by just two weeks, and will end on December 1. This emerges from a draft ordinance published by the Ministry of Finance in an abbreviated procedure.

Unless the ordinance is extended, the price of fuel will jump tomorrow night (Tuesday) by about NIS 0.50 per liter of gasoline. The current price at fuel stations, after the cut in the excise, is NIS 6.46 per liter. The cost to the state of extending the ordinance by two weeks is estimated at 75 million, which will be in addition to nearly NIS 2 billion that the public purse has lost since the tax reduction was introduced in April.

If the ending of the tax reduction is postponed, fuel prices will jump at the next price review, which will come into force at the beginning of December. The price will jump by about NIS 1 per liter, adding about NIS 50 to the cost of filling the fuel tank of the average car.

In discussions at the Ministry of Finance last week on extending the ordinance, difficulties arose in finding budget sources for continuing the excise cut, which is apparently why it was decided to extend it for two weeks only.

Another possible reason is that within two weeks responsibility for the matter will switch from current Minister of Finance Avigdor Liberman to his successor in the new government. Prime minister designate Benjamin Netanyahu promised in his election campaign to reduce the price of fuel, but he will be greeted by a steep price rise.

Published by Globes, Israel business news – en.globes.co.il – on November 14, 2022.

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