Fuel in Israel more expensive than most of EU

Sonol gas station

Fuel tax revenues jumped 20% in December, while global oil prices reached a 12-year low.

According to the annual state revenues report for 2015 published last week, net revenues from fuel taxes totaled NIS 17.2 billion in 2015, 5.8% more than in 2014.

One important point is that this figure is not the total amount collected, which probably exceeded NIS 18 billion; it represents the net amount deposited in the state treasury, after settling accounts with the Palestinian Authority and deducting refunds to carriers under the diesel arrangement.

The Israel Tax Authority ended 2015 with an impressive finale: December fuel tax revenues were no less than 19.2% higher than in December 2014.

The Tax Authority found it difficult to explain this week this steep rise, saying, "The fuel market is volatile, with bimonthly reports, retroactive reports, seasonal factors, inventory accumulation, etc. One exceptional month, in this case December, is not that significant. From an annual perspective, the increase in revenue is offset, for example, by June, when net revenues were down 8%, and January, when they were 6% lower than in the corresponding months in 2014."

Despite the Tax Authority's response, a rise of almost 20% in a month in which global fuel prices plummeted to a 12-year low is unprecedented and undoubtedly an interesting coincidence. Anyone looking for more such coincidences is likely to find them in the revised fuel prices data from January 18 of the European Union in Brussels, which show that only two EU countries, Italy and the Netherlands, have higher prices than Israel for a liter of gasoline, even after the "generous" reduction from the beginning of January.

Another indication is the fact that the tax rate (excise tax plus VAT) on a liter of gasoline in Israel reached a peak of almost 67% of the consumer price in January, a higher proportion than all EU countries except for the UK, Greece, and Sweden, far higher than the EU average, and one of the highest in the world.

Published by Globes [online], Israel business news - www.globes-online.com - on January 26, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Sonol gas station
Sonol gas station
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