According to the Ministry of National Infrastructures, the real price of gasoline at the port gates, which is directly derived from its price in the world, was NIS 2.88 per liter last week - barely 38% of the price at the pump. All other components of the consumer price are the middlemen's profits and especially the hefty taxes, including the excise (which was raised by 1% on Saturday night) and VAT.
This means that between the rising price of oil in the world, on which the Israeli government has no control, and the consumer price in Israel, there ought to be a healthy air cushion that enables the country to absorb price shocks and alleviate their impact on its citizens.
To activate such an air cushion, the excise should be used in a dynamic way; in other words, raise it when fuel prices are low, and lower it in hard times like now, when fuel prices are skyrocketing.
But the Ministry of Finance officials, as usual, only understand the first part of the method; i.e. raising the excise. When they are asked about the possibility of lowering the excise, even in order to prevent dizzying inflation, the system suddenly crashes and we get the human equivalent of the computer blue screen of death.
Cut the gasoline excise? Sorry, our program does not have that concept. We'll have to check and get back to you. Give us a few years.
Minister of Finance Yuval Steinitz's second excuse is, "It should be remembered that we lowered public transport fares in the periphery."
We are ready at this point to conduct a Trivia quiz among MKs (who get a government Mazda 6), ministers who get an (Audi A6 or Skoda Octavia with a chauffer), and senior Ministry of Finance officials (who get Mazda 3 or Ford Focus with free gas for 40,000 kilometers a year), asking them, "What is the price of an urban bus fare?" or, "What is the train fare between Haifa and Tel Aviv (not including accident insurance)?"
We have the feeling that the answers will be rather remote from reality.
The answer to the argument that the excise in Israel is similar to the excise in Europe is similar to answer to the argument that other countries have higher gasoline excise. True, there are such countries in the world, but they almost all have superb public transportation systems that operate 24/7 from anywhere to anyplace.
In Israel, if you want to live in the periphery and work in the center of the country, and if you happen to be a secular Jew who wants to use your infrequent free days to travel, you have no choice but to burn gasoline.
This is all true today, and it will be just as true in 6-9 months when the price of gasoline will exceed NIS 8 per liter. So why waste words?
Published by Globes [online], Israel business news - www.globes-online.com - on May 1, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011