Prediction: the tax reduction on fuel will be extended and the price will also drop significantly next month

Despite the significant drop in oil prices worldwide by about 10% since the end of last month and the fall in the dollar exchange rate by about 5% in recent weeks, Finance Minister Avigdor Lieberman intends to extend the discount on the fuel tax until November 15. The meaning: fuel prices are expected to drop significantly next month as well, after at the beginning of the month the price per liter of fuel dropped from NIS 8.08 to NIS 6.58 for the self-service stations.

According to temporary calculations conducted by experts in the field of energy, if the price of a barrel of oil continues to be around $100 and even less and the dollar rate in Israel is between NIS 3.20 and NIS 3.30, the price of fuel in Israel is expected to decline on September 1 to around NIS 5 and a few tens of agorot per liter, approximately one shekel less than its current price.

As of today, the two tax reduction orders signed by Lieberman - each in the half shekel - are expected to expire at the end of this month. Now, Lieberman intends to sign an order that will extend the discount on an entire shekel for another two and a half months, until after the holidays.

Lieberman signed the first order to reduce the tax by half a shekel in April of this year, and the day before the dissolution of the Knesset, he signed an order for an additional reduction of half a shekel and to extend the initial order until the end of the current month. The significant reduction, alongside the decline in fuel prices and in the dollar exchange rate, led, as noted, to a sharp decline in fuel prices.

In an interview, Lieberman noted a few days ago that he would examine the continuation of the discount based on oil prices and the dollar rate around the world towards the end of the month. However, following the high inflation rate in Israel published this week by the Central Bureau of Statistics, which stands at an annual rate of 5.2 percent, it is now becoming clear that Lieberman will extend the order in an attempt to moderate the price increases.

In terms of the cost to the state treasury, the reduction in the tax on diesel from April to the end of the year and the reduction in the tax on gasoline from April to the end of August is estimated at NIS 1.44 billion.

In the background, the inflation index next month will enter into the calculation of the significant increase in electricity prices by 8.6 percent, and another series of increases in the food and various products from abroad that importers refused to postpone the increase.

In response to a question, The Finance Minister's office said that "the tax discount will continue." Therefore, the original date of the shekel discount will remain in effect until November 15, two weeks after the elections. The discount on diesel fuel in half of the shekel will remain in effect until December 31 of this year.

View the Original article in Hebrew.

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