Finance Ministry aims to cut record high gas prices by 50 agorot, needs attorney-general's approval

The Finance Ministry is seeking to cut gasoline prices by another 50 agorot per liter for one month after the price rose overnight Thursday to a record NIS 8.27 per liter, with the move still awaiting approval from the attorney-general.

Finance Minister Bezalel Smotrich intends to introduce the additional reduction, which, if approved and completed, is expected to bring the price of a liter of gasoline down to about NIS 7.77, almost exactly the price motorists paid in September.

The price of self-service 95-octane gasoline rose by 52 agorot from September's NIS 7.75 per liter, following a reduction in the excise tax. Motorists choosing full service will pay an additional 26 agorot per liter, bringing the price to NIS 8.53.

The previous record was NIS 8.25 per liter, set in September 2012. At the beginning of September, the price of gasoline returned to exactly that level, before Smotrich intervened and reduced the excise tax by 50 agorot per liter.

That reduction brought the price down to NIS 7.75, but a sharp rise in global gasoline prices and the strengthening of the US dollar wiped out the entire reduction in less than a month and pushed the price two agorot above the previous record.

Steep increase in gas prices come from international markets, dollar strengthening

According to the Energy Ministry, gasoline prices on international markets rose by approximately 13% during the calculation period, while the dollar strengthened by about 3%. Both figures feed directly into Israel's regulated fuel-price formula and led to the unusually steep increase that took effect at midnight.

However, the new reduction cannot yet take effect. The Finance Ministry's legal advisers have already determined that there is no legal impediment to the finance minister signing another reduction, but the ministry is now waiting for the position of the attorney-general.

Only then will it be possible to publish the wording of the order for public comment, review the comments submitted, and proceed to the minister's signature.

This would be the second excise-tax reduction within a short period and during an election period, making the legal issue particularly sensitive. Legal approval was also required for the excise-tax reduction in September, which was approved as an exceptional measure and lowered the price by half a shekel.

This time, Smotrich is seeking to repeat the same move after the price increase that took effect overnight effectively erased the entire previous discount.

Smotrich may sign reduction in gasoline prices, ministry announces

The Finance Ministry said on Thursday morning that "The position of the Finance Ministry's legal advisers is that there is no impediment to the finance minister signing a reduction in the price of gasoline for the coming month, as he requested. The attorney-general must now provide her position, and accordingly it will be possible to publish the wording of the price-reduction order for public comment."

The ministry further said, "Finance Minister Bezalel Smotrich intends to sign a reduction of 50 agorot per liter of gasoline for one month, subject to consideration of the public's comments."

Until the entire process is completed, if it is ultimately approved, motorists will continue to pay the full price of NIS 8.27 per liter for self-service gasoline, the highest price ever paid at Israeli gas stations.