Sources inform ''Globes'' that the Israel Tax Authority plans to raise the excise on natural gas, beginning in a year or two.
The sources added that the Tax Authority also plans to raise the excise on fuel oil by hundreds of percent over several years, with the first tax hike due within weeks. The gradual increase will resemble the increase in the excise on diesel.
The current excise on natural gas and fuel oil is NIS 14 per ton, compared with NIS 3,300 per ton for diesel.
The excise hike on fuel oil is unrelated to the crisis in Egyptian gas deliveries, but an old decision taken at the same time as the decision to raise the excise on diesel. Implementation of the decision on fuel oil was delayed under pressure from manufacturers, who said that they had no alternative fuel for production. They added that raising the excise on fuel oil would greatly harm Israeli industries' competitiveness and lead to mass layoffs.
Natural gas is now entering the market as a fuel for industrial production, including by Makhteshim Agan Industries Ltd. (TASE: MAIN), Hadera Paper Ltd. (AMEX: AIP; TASE: AIP), and most recently, Oil Refineries Ltd. (TASE:ORL).
Since January 2005, the excise on diesel has quadrupled from NIS 0.69 per liter to NIS 2.79 per liter, resulting in a huge differential between the excise on diesel and fuel oil. The situation is further distorted by one of the arguments for raising the excise on diesel - "to educate the public to use cleaner fuels" - a bizarre argument, given that fuel oil is a much greater pollutant than diesel.
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