The Ministry of Energy and Water Resources has set the price of full-service 95 octane gasoline at NIS 8.05 per liter as of midnight tonight, and the price of self-service gasoline at NIS 7.84 per liter, not NIS 7.76 as earlier estimated. The reason for the higher estimate is the strengthening of the shekel against the dollar.
Prime Minister Benjamin Netanyahu has instructed Prime Minister's Office director general Harel Locker to examine last-minute options to prevent or ameliorate the pending price hike. However, the increase is probably unavoidable because the Ministry of Finance refuses to cut the excise, or even the double taxation - VAT on the excise - on fuel.
The Knesset will today vote on a bill by MK Meir Sheetrit (Kadima) to abolish the VAT on the excise, which could reduce the price of gasoline by up to NIS 0.50 per liter. The coalition will probably kill the bill.
Labor Party chairwoman MK Shelly Yacimovich today called on Netanyahu to halt the gasoline price hike. "Netanyahu knows perfectly well that half the price of gasoline isn't due to global developments, but is simply a regressive indirect tax to turn the middle classes into a revenues pump, even as direct taxes on companies are being constantly cut. This is a distorted tax policy that widens gaps."
Within the government, Minister of Energy and Water Uzi Landau told “IDF Radio" (Galei Zahal) today, "The government should stop and think. It is important to remember that, in Israel, a car is not a luxury for many people, but a work tool. Couples who could afford to buy apartments in central Israel bought them in the periphery, and must drive to work."
Landau said that the price of gasoline should be NIS 5-6 per liter, and that taxes were excessive.
Published by Globes [online], Israel business news - www.globes-online.com - on February 29, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012