During the last weeks of 2010 while the rest of the world was busy preparing for the new year and new decade, the Israeli Government was busy preparing a very special sort of year’s end gift for the nation’s gasoline consumers. In mid-December 2010, the Israeli Government announced a proposed increase in fuel excise taxes which would affect all fuel prices from home heating oil to car gasoline prices. Despite the fact that the fuel excise tax increase would affect all types of fuel, economic pundits focused on the smallest common usage unit, the cost of a liter of 95 octane gasoline, because this particular increase equally affects everyone from public transportation users to private car owners. All of us were facing a price increase, be it in the price of riding a bus, taking a cab or driving our own cars.
When the increase was first proposed frustrated Israelis reacted by opening a Hebrew language “Gasoline Price Increase Protest Page” on Facebook, (no one I know pressed “like” on that page!). There was some less than logical talk about organizing a massive protest, traffic jams on all of the country’s major highways, in an effort to delay the fuel excise tax increase. But all of those protest efforts fell by the wayside when on Monday, December 27, 2010 The Knesset (The Israeli Parliament), through its Finance Committee approved the fuel excise tax increase as part of the “Government’s Arrangement Act”. On that date for the second time in 18 months the government boosted the fuel excise tax while publicly proclaiming that their aim was to give tax revenues a shot in the arm. And just in case gasoline consumers thought this was a one time increase the “Government’s Arrangement Act” includes another automatic fuel excise tax increase of 20 agorot (about USD 5 cents) per liter at the beginning of 2012!
As of midnight on January 1, 2011 one liter of 95 octane gas at the self-service pumps jumped from New Israeli Shekel (NIS) 6.71 to NIS 7.14 – that’s almost a 7% jump in price exclusively due to the increase in excise tax and completely unrelated to the price of a barrel of oil on the world markets. For American readers who live in gallons, just over four liters equal a gallon, this means that Israelis are now paying about $7.14 for one gallon of self-service pumped 95 octane gasoline! What was that you Americans were saying about paying $3.07 a gallon across the United States? But never mind the actual price of gasoline, the bottom line on Israeli gasoline prices is that between Value Added Tax (VAT) and the new excise tax Israelis are now paying just about 58% of the per liter self-service pump price in taxes!
Expensive gasoline prices due to the excise tax increase might have seriously inhibited our household’s budgetary juggling abilities, however, I and hundreds of other Jerusalemites share an open secret. We have one local gas station on our side! Unlike most Israeli gas stations all of which pump out at a standardized government set maximum price, Delek Gas Station in the Nayot Neighborhood of Jerusalem runs a Tuesday weekly sale at its self-service pumps. This sale, affectionately called “Tank Up Tuesday!” by our household’s members, is the jiggle that gives our budgetary juggle its healthiest boost! The sale has been running for upwards of a year and judging from the growing length of “Tank Up Tuesday!” lines, they are reminiscent of the 1979 energy crisis gas lines, more and more Jerusalemites are helping this gas station to increase its profits while at the same time managing to pay just a little bit less for our self-service gasoline. Last week with the new prices in effect this is how it worked: full-service pump prices are now NIS 7.24 per liter (that is about $7.24 per gallon), on “Tank Up Tuesday”, Delek Gas Station changes its self-service pump price from NIS 7.14 to the full-service pump price of NIS 7.24 then reduces that by 50 agorot a liter to NIS 6.74! That worked out to be a 40 agorot savings per liter on the regular self-service pump price. For our household with its large 60 liter tank car that means that we are saving almost NIS 24 per tank full or as we prefer to think of it we are getting close to 3 liters (almost a gallon) of gasoline for free! This slight actual savings always gives us a huge psychological lift especially when we remember to ask for our free copy of “Yediot Aharonot” the largest selling Hebrew daily paper. Indeed for all of us Jerusalemites suffering from the excise tax blues and wondering why it is that we don’t get together and organize an old-fashioned tax revolt “Tank Up Tuesday!” is just the sort of deal we need more of!