Daily Israel Report

Fuel at $8 Gallon; ‘Go Take the Bus’

“Let them eat cake – and take the bus:” The government rejects erasing automatic tax hikes on $8 a gallon gas to take effect Thursday.
By Tzvi Ben Gedalyahu
First Publish: 2/28/2012, 8:13 AM

Gasoline at 8 shekels a litre
Gasoline at 8 shekels a litre
Flash 90

In a modern version of Marie Antoinette’s “Let them eat cake” advice to hungry French citizens, the Finance Ministry has rejected erasing automatic tax hikes on higher fuel prices to take effect Thursday.

The price of gasoline at the pump is scheduled to rise at midnight Wednesday to eight shekels a liter, which works out to approximately $8 a gallon.

The environmentally-friendly advice will not help would-be passengers fed up with buses that are so crowded they often speed past bus stops, and fed up with trying to take trains that are subject to frequent breakdowns and wildcat strikes.

The worldwide surge in the price of crude oil is the main factor behind the increase in the price at the pump. However, another factor is stiff excise taxes, which rise proportionately with the higher prices for gasoline.

The government is enjoying a monthly surplus, but Finance Ministry director Doron Cohen told the Maariv newspaper that it already has forfeited $700 million dollars in fuel taxes by agreeing to cancel planned hikes in excise taxes.

“We have no influence on the price of gasoline, but we can influence the use of alternatives and encourage the public to use public transportation and buy cars that use less gas," he said.

The newspaper noted that he did mention the “poor transportation service in Israel and the possibility that the ministry cut outlays for vehicles for its own employees, who enjoy driving leased vehicles at the expense of the taxpayer.”

Cohen claimed that the cost of fuel at the pump in Israel is relatively reasonable when compared with European countries. However, European salaries are far higher than those of the average Israeli.

He also stated a dire forecast for consumers, saying that higher oil prices ripple through the economy, starting with higher costs for air cargo and ending up with a higher price tag at the store.