Gas prices were set to fall slightly after Finance Minister Avigdor Liberman said Tuesday that the state will forgo half a shekel of taxes per liter of gasoline.
As of this month, Israelis pay NIS 7.44 per liter ($8.76 per gallon) of unleaded gasoline, over half of which is taxes. That price is NIS 0.39 ($0.12) more than in March.
With the price drop, Israelis will instead pay NIS 6.94 per liter ($8.20 per gallon).
Liberman said the change will be “immediate,” although fuel prices are usually only updated at the start of each month.
The minister said that the government was able to announce the cut thanks to an increase in state revenues in the last quarter as well as recent economic growth.
“We’re not hoarders in the Finance Ministry, we’re not squirreling money away; if there is the possibility of making things better and returning the money to the public, we need to do that, and now we can return half a shekel of the tax per liter of unleaded and a liter of diesel,” Liberman said.
According to Channel 13 news, the tax cut will cost the government some NIS 800 million (approximately $250 million) in revenue over a three-month period.
The announcement comes amid rising prices, with inflation rises and the costs of some products additionally rising due to Russia’s invasion of Ukraine.
Earlier this year, thousands of people demonstrated in Tel Aviv against the rising cost of living. In December 2021, the Economist ranked Tel Aviv the world’s most expensive city, citing the strength of the shekel and increased costs of food and transportation.
Earlier this year, the government announced an NIS 4.4 billion ($1.4 billion) plan to address the rising cost of living, but many of those tax breaks have not yet come into effect.