Report: Israelis Pay Sixth Highest Gas Tax in West

Study, led by Prof. Dan Ben-David reveals that most of the increases in gas prices are not due to global petroleum prices but rather to taxes on refining and distribution of price-controlled fuel.

Israel has the sixth-highest gasoline taxes in the Western world, as measured by the purchasing power of its consumers, the Taub Center for Social Policy Studies revealed in a report yesterday.

The study, led by Prof. Dan Ben-David, the center's director, said most of the increases in gas prices are not due to global petroleum prices. Rather, they are due to taxes on the refining and distribution of the price-controlled fuel.

He also said that there is no positive advantage to such high taxes in Israel. "In the absence of significant transportation options in Israel, taxes on gasoline cannot serve as a tool for significantly reducing the use of automobiles," Ben-David said. "Raising them imply causes hardship to the population."

The report comes before prices at the pump are set to rise at midnight Friday to NIS 8.26 per liter, a record and a jump of 56 agorot.

It found that the world price of oil in shekel terms is about the same now as in 2008, yet Israelis will be soon be paying NIS 1.20 more.

"At a time when the price of petroleum fell in dollar terms, the profit margin that the refining, transportation and distributing companies were getting grew by 34 agorot a liter, while the government of Israel increased taxes on each liter of gasoline by 88 agorot from July 2008," Ben-David said, estimating that the real tax on fuel rose 21% in that period.

Last June, when the tax on each liter of gasoline in Israel was NIS 4.01, in France the rate was equivalent to NIS 3.66, in Denmark NIS 3.15, in Austria NIS 1.24 and in the United States 48 agorot on a purchasing power parity-adjusted basis, according to the report.

"The taxes alone on a liter of gasoline in Israel were higher than the total cost of a liter of gas to the consumer in America," Ben-David said.

A gas station in Haifa.
Moran Maayan