Prime Minister Benjamin Netanyahu has decided to cut the tax on gasoline by NIS 0.10. In the coming months, the Ministry of Finance will put together proposals for finding sources of funding to lower the cost of fuel. The prime minister's decision means that the self-service price of a liter of 95-octane gasoline will be NIS 7.74. "The state does not control the world price of oil, but we do not have to collect additional tax on every price rise," Netanyahu said.
This is the third time in a year that Netanyahu has intervened over the price of fuel.
Earlier this evening, the government decided to take no action over the fuel price rise, despite public criticism and protests in the Knesset. On Tuesday night, various possibilities were examined for curbing the sharp price rise, but this morning it was reported from the Prime Minister's Office that none was realistic, and that they would cost hundreds of millions of shekels a year. The prime minister's aides explained that any attempt to intervene in the price would eventually lead to a rise in the fiscal deficit or the imposition of a tax that would hit the public elsewhere.
The price of gasoline for March, which was supposed to rise to a new all-time high of NIS 7.84 per liter, will now be NIS 7.74. The price of a liter of gasoline delivered by a fuel station attendant will be NIS 7.95, and will not break through the NIS 8 level.
The main cause of the price rise is the rise in the world price of oil, but the weakening of the shekel against the US dollar in recent days also had an effect, contributing NIS 0.06 to the final price rise.
Since the beginning of the year, the price of gasoline has risen by NIS 0.73 per liter, or more than 10%.
Published by Globes [online], Israel business news - www.globes-online.com - on February 29, 2012
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