Fuel Price Reduction: Israel Cuts Excise Tax Despite Concerns

Attorney General Gali Baharav-Miara has approved Finance Minister Bezalel Smotrich's initiative to reduce fuel prices, despite strong objections from professional staff at the Treasury who fear the move amounts to election-year economics.

According to details previously reported by Kan News, the Treasury's legal advisor, Dudi Kopel, submitted an opinion to the Attorney General's office acknowledging that while the plan to cut the fuel excise tax by approximately half a shekel per liter contradicts the position of Treasury professionals, there is no legal barrier to approving it. Kopel noted that similar measures were implemented in Israel and other countries in 2022, and given the need to ease the cost of living burden, the move can proceed.

The Finance Minister's initiative aims to soften the anticipated increase in gasoline prices for consumers. Under the plan, prices would drop by roughly half a shekel per liter, a step estimated to cost the state treasury approximately NIS 300 million per month. The reduction comes against the backdrop of recent fuel price increases, with a liter of 95-octane gasoline in self-service currently standing at NIS 8.25. The new price is expected to fall to NIS 7.75.

The Finance Minister intends to sign the order promptly so the price reduction can take effect as early as this weekend. The move is expected to provide relief to many drivers who have been grappling with rising fuel costs in recent months, following the Attorney General's formal approval of the measure.