Daily Israel Report

Gas Prices to be Lowered, Strike Not Yet Called Off

In light of nationwide strike threats, PM Netanyahu will announce price cuts this evening - but Histadrut says they're not likely to be sufficient.
By Hillel Fendel
First Publish: 2/10/2011, 1:57 PM / Last Update: 2/10/2011, 1:45 PM

Flash 90

In light of nationwide strike threats, Prime Minister Binyamin Netanyahu will announce a series of price cuts this evening at 6 PM.

In recent days and months, the price of staples such as water, bread and gas have risen significantly. The Histadrut Labor Union has threatened a nationwide strike as a result – and is unlikely to reduce the pressure even after this evening’s announcements.

The price-cuts were to have been announced yesterday, but Finance Minister Yuval Steinitz’s brief hospitalization caused a delay.

Netanyahu is expected to drop the price of gas by 20 agorot, effective immediately. The price went up on January 1 by 43 agorot per liter, and another 12 agorot on Feb. 1, for a total increase of 8.2% in a month. A 20-agorah decrease – equal to approximately 20.5 cents a gallon – would bring it to 7.06 shekels per full-service liter ($7.23 a gallon).

The Prime Minister is also expected to announce that gas prices will remain steady for the coming months. The price of gas is adjusted every month, and has risen for the past six months straight.

In addition, Netanyahu is also expected to nullify a previously announced public transportation price hikes, as well as subsidies for water and bread for the lower-earning classes and a broadening of the negative income tax program.

To pay for the above, Netanyahu will apparently freeze business tax cuts, and may even impose across-the-board budget cuts on government ministries.

Ofer Eini, head of the Histadrut said, “We will hear what Netanyahu has to say, and then decide whether to continue towards a strike. But I can tell you that if he does not announce an increased minimum wage for the million workers who earn only 3,850 shekels a month, and if he doesn’t reduce water prices, we will continue our struggle. Water prices have been tripled, and the government is simply making money on the backs of the hard-working public.”

Eini admits that some price increases, such as part of the gas rise and that of many foodstuff, are “not dependent on the government, but public sentiment is that it is already too much and the government is not doing enough. Prime Minister Netanyahu was elected to provide solutions; that’s his job.”

Eini feels it is unlikely that the government will impose across-the-board budget cuts: “There is a surplus of tax collection, everyone knows that. He can use that money to pay for water and other increases.” On the other hand, it has been claimed that much of the tax surplus is being used to pay off the national debt.