Israel's gasoline taxed at world's highest rate

Gasoline Photo: Shutterstock

The maximum price of government price controlled 95 octane gasoline is falling sharply as oil prices collapse but Israel's excise is fixed at NIS 3.074 per liter.

Israeli drivers, or at least those still driving during the lockdown, enjoyed a handsome windfall on April 1st when the maximum price of government price controlled 95 octane gasoline at self-service pumps in Israel fell by NIS 1.03 to NIS 4.89 per liter.

However, that means that the rate of tax on gasoline (excise + VAT) has now risen to an historic high of 78% of the price of a liter of gasoline, putting Israel in first place, not only in the OECD, but in the world, in terms of tax rates for gasoline. In addition, the relative price of gasoline, adjusted to the dollar rate, puts Israel in the top ten worldwide with a price of $1.35 per liter.

The distortion stems from the price of gasoline under government supervision, which has a fixed rate of NIS 3.074 excise per liter, regardless of the actual price of a barrel of oil worldwide and refinery costs. The price of gasoline fell dramatically by 63% last month to just NIS 0.55 per liter following the collapse of oil process on world markets due to the coronavirus pandemic. But the price per liter of excise stayed fixed.

Published by Globes, Israel business news - www.globes-online.com - on April 5, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Gasoline Photo: Shutterstock
Gasoline Photo: Shutterstock
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