The price of 95 octane gasoline will jump tomorrow to an all-time high of NIS 8 per liter, however the Ministry of Finance says that it will not reduce excise on gasoline in an effort to ease the burden on drivers. Ministry of Finance acting director general Doron Cohen told Hebrew daily "Ma'ariv" that the ministry has already foregone NIS 2.5 billion this year in revenues from gasoline excise as a result of the Trajtenberg recommendations, and it has no intention of carrying out additional tax cuts.
"We have no control over gasoline prices, but we do have an influence over alternatives we offer the public, and we are encouraging and directing the public to use public transportation, and to buy fuel-efficient vehicles," Cohen said. Nonetheless, he did not talk about the poor state of public transportation in Israel, or about the possibility that the Ministry of Finance could cut travel expenses for government officials, among them ministry employees, who benefit from car leasing contracts paid for by taxpayer money.
"In principle, gasoline prices are relatively low," Cohen added, in reference to specific European countries where gasoline prices are a little higher than in Israel. However, salaries in these countries are much higher, a fact that Cohen did not mention.
Cohen warned that as a result of the gasoline price hike, it is likely that prices of certain products will also rise. "Gasoline is an input for all other products in the economy from cottage cheese, to heating, to transportation of products, as well as flight prices. The price hike will be felt in many areas."
Published by Globes [online], Israel business news - www.globes-online.com - on February 28, 2012
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