Excise tax on gasoline will drop to stave off price hike, Smotrich announces

By ELIAV BREUER

Published: JANUARY 31, 2023 12:50

Updated: JANUARY 31, 2023 20:33

Illustration image of a man fueling his car at a gas station, in Jerusalem, on June 28, 2022. (photo credit: OLIVIER FITOUSSI/FLASH90) — Illustration image of a man fueling his car at a gas station, in Jerusalem, on June 28, 2022.

(photo credit: OLIVIER FITOUSSI/FLASH90)

The move comes after criticism from Opposition leader MK Yair Lapid about the rising gas prices.

Finance Minister Bezalel Smotrich announced on Tuesday that he had decided to publish a decree to lower the excise tax on gas in order to offset a steep price hike expected at midnight on Tuesday.

The tax cut will come into effect on Thursday.

Highest gas price since June '22

The Energy Ministry announced on Sunday that beginning on February 1, gas prices would rise by 33 agurot to NIS 7.17 per liter, the highest price since July 2022.

The announcement led to criticism of Smotrich and Prime Minister Benjamin Netanyahu, since they announced in a press conference on January 11 that part of their plan to fight inflation included lowering gas prices.

Prices rose by nine agurot per liter on January 1. Following the press conference, Smotrich signed a decree lowering the excise tax by 10 agurot per liter for the remainder of 2023.

Israeli Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich seen during a press conference, at the Prime Minister's office in Jerusalem, on January 25, 2023. (credit: YONATAN SINDEL/FLASH90)

Netanyahu said in a statement that he and Smotrich had held “ongoing consultations” in the past few days to slow the price hikes, and he congratulated his coalition partner for the decision to further cut the excise tax.

Opposition leader MK Yair Lapid attacked the government in a speech in the Knesset plenum on Monday evening.

“The finance minister and prime minister convene a strange press conference and announce that gas prices will not rise – and now they are soaring,” Lapid said. “They announced that electricity prices would only rise by 2.5%, and now they are rising by 7%. They do not even have an explanation why this is happening.”