PM steps in again to reduce gas increase

Self-service liter of gas in Israel now NIS 7.79, far more than in the US, but still less than in much of Europe.

Gas station - By Marc Israel Sellem

Gas station - By Marc Israel Sellem

For the third time this year Prime Minister Binyamin stepped in Saturday night to significantly reduce the size of a planned gas increase, meaning the price of gas rose at midnight by five agorot, instead of the planned 20 agora hike.

The PM’s decision means that one liter of gas at a full service station will now cost NIS 8 ($8.16 per gallon), and a liter of self service gas will cost NIS 7.79 ($7.95 per gallon).

Netanyahu intervened in last month, as well as in January, to reduce the tax on gas, thereby reducing the accumulative hikes by 65 agorot per liter (66 cents a gallon).According to a statement released by the Prime Minister’s Office, the revenue lost by the decreased tax will be made up by “efficiency” measures to be employed by each of the government’s ministries. Under the plan, ministerial staffs will be reduced by some 2% as retiring employees will not be replaced.

The decision was made together at a meeting Saturday night with Finance Minister Yuval Steinitz, who – according to the PMO – said the plan will ease the situation for the country’s citizens without harming the economy. Funding the lower gas hikes through government efficiency measures is the responsible and right economic thing to do, he said.

Just prior to this announcement, Steinitz appeared on Channel 2’s “Meet the Press” and said Israelis would rather pay more for gasoline than deal with the threat posed by a nuclear armed Iran.

“Gas prices are up all over the world due to sanctions on Iran,” Steinitz said. “I’m sure Israel would prefer to pay more for gas than [deal with] the threat of a nuclear Iran.”

Labor MK Isaac Herzog criticized Netanyahu’s last-minute intervention, saying the move would not distract from prime minister’s failure to address the country’s social ills.

“Netanyahu’s zigzagging will not cover up his and his government’s most serious failure: expanding [social] disparities and tightening the grip on Israeli citizens,” Herzog wrote on his Facebook page.

Netanyahu could have reduced taxes on fuel until global gas prices became more moderate again, Herzog said. “His numbers game is a practice in self-righteousness and hypocrisy.”

According to government figures, even with Saturday night’s gas hikes, gas per liter in Israel is still cheaper than in the Netherlands (NIS 9.22 a liter), Britain (NIS 8.46), or Norway (NIS 10.19). However, the average wage in each of those countries is also significantly higher than in Israel.

In the US the average price for a liter of gas is NIS 3.91.

Meanwhile, even as gas prices did not rise as much as expected at midnight, the price of electricity went up 8.3%, an increase that will significantly raise the cost of air conditioning homes this summer.


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