The transport organizations' struggle to reduce the excise on diesel has reached the Knesset. The Knesset Finance Committee yesterday called on the Ministry of Finance to consider restoring price controls following the sharp price rise since January.
The Finance Committee discussed the transport organizations' demands to reduce the excise on diesel and to restore price controls. Last Wednesday, the transport organizations effectively shut down the Ayalon Highway for several hours in protest at the rise in diesel prices, and they are threatening to go on strike.
Israel Tax Authority senior deputy director of finance and development Boaz Sofer rejected the demands. He said that the industry's problem wasn’t due to the higher excise, which is a negligible part of the price, but was due to the high margins charged by the fuel companies. The price of diesel has risen 40% since January because of rising global oil prices. Price controls on diesel were lifted 15 years ago.
The Ministry of National Infrastructures Fuel Administration and the Ministry of Finance Budget Division oppose restoring price controls on diesel. They argue that government intervention will not improve competition between the fuel companies.
Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2008
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