PM May Intervene on Gasoline

Netanyahu says will consult with Steinitz, Fischer, then decide how to best deal with howls over record-high gas prices.

Following howls over record-high gas prices, Prime Minister Benjamin Netanyahu vowed yesterday to think things over. While stopping short of actually pledging to lower prices somehow, Netanyahu said he would consult on gasoline prices with Finance Minister Yuval Steinitz when the latter returns from abroad.

Netanyahu added that Stanley Fischer, the governor of the Bank of Israel, will also be at the meeting. Then a decision will be reached. "I promise, it will not take long," the prime minister said, speaking to the Knesset to commemorate its first sitting in February 1949.

Netanyahu-Tomer Appelbaum-Feb. 2, 2011
Tomer Appelbaum

He pointed out that Israeli gasoline prices rise and fall with the price of crude in world markets, but acknowledged that tax makes the burden more onerous. Even adding 20 agorot per liter hurts, and lowering tax would help, he said.

Sources in the Knesset surmise that Netanyahu's address was spurred by concerns for his image after the public outcry over the January 1 increase in excise tax on gasoline.

Support for the excise-tax increase has been vanishing in the Knesset. Haim Katz (Likud ), chairman of the Labor, Welfare and Health Committee, warned yesterday that unless Netanyahu comes to his senses, he won't remain prime minister for long. "If we don't listen, we'll lose the government," he said, adding that Likud could shrink to 12 seats from 27 in the next parliament if action isn't taken.

Sixty-three of the Knesset's 120 members have signed a petition calling on Netanyahu to rein in gasoline prices. Ronit Tirosh (Kadima ), who initiated the petition, says the signatories include several coalition members including Likud's Carmel Shama-Hacohen, Danny Dannon and Tzipi Hotovely, as well as members of Yisrael Beiteinu, Shas and the Haredi parties.

The petition calls on the prime minister to immediately lower tax on gasoline and stop the "worrying" upward trend of gasoline prices. "Just two years ago gas cost less than NIS 5 a liter," the petition states. This week it's NIS 7.26 per liter (for 95-octane ), which affects the prices of industrial products, public transportation and electricity.

After Netanyahu's speech, National Infrastructure Minister Uzi Landau said he expects the Finance Ministry to "do its part" and lower gasoline prices. Most of the money people hand over at gas stations is tax, he said, so the main role is the treasury's.

At present the profit margin on retail gasoline sales is about 10%. Landau points out this isn't what the gas retailers net, it's just what they get back per liter, on top of which they have costs.