An instruction handed down by Minister of Finance Yuval Steinitz this evening has reduced the planned rise in electricity rates tomorrow to 12% instead of 20%. The Ministry of Finance was able to cut the planned hike by lowering excise on diesel and reducing purchase tax on diesel for producing electricity by 69%. The purchase tax on diesel for producing the electricity will now be the same as for industry.
The Ministry of Finance said that because of the rise in demand for electricity, the construction of installations for generating electricity from solar energy, the rise in fuel prices worldwide, and stricter Ministry of Environmental Protection regulations on burning fuel, it was not possible to avoid a hike in electricity rates altogether. But the Ministry of Finance stressed, "Even so the price of electricity will still be lower after the expected rise than it was in February 2010 before prices were reduced."
The Public Utilities Authority (Electricity) had announced earlier today that electricity prices would rise by 20% on Monday, mainly due to disruptions in the supply of Egyptian gas, and the need to replace it with far more expensive diesel. The Authority expressed its disappointment that measures had not been taken to make the hike lower than 20%, but it now seems the Ministry of Finance has intervened at the last minute to ease the price rise.
Published by Globes, Israel business news - www.globes-online.com - on August 7, 2011
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