A Knesset Research and Information Center survey has found that since price controls on diesel were lifted in January 2005, Israel has the most expensive diesel in Europe - 35% above the average in terms of purchasing power.
The study examined fuel prices in the past decade. The price of diesel for heating rose 386.5% and the price of diesel for vehicles rose 242.6%. In contrast, the price of 95 octane gasoline, which is government controlled, rose by 92.4%. Between January 2005, when the Knesset removed price controls on diesel as part of a fuel excise reform, and January 2011, the excise on diesel rose 306.6% in nominal terms and 245.1% in real terms.
The average price of diesel in the European countries examined on June 27, 2011, was €1.11 per liter, compared with €1.56 per liter in Israel (in purchasing power terms). Diesel cost $1.48 per liter in the UK, €0.99 per liter in France, and €0.84 per liter in Denmark, the lowest price in the comparative study.
Former Knesset Economics Committee chairman MK Ofir Akunis (Likud) commission the study. Last month, he submitted a private member's bill to reimpose price controls on diesel. Today, he said that the study's findings support his bill, and he called on Minister of National Infrastructures Uzi Landau to support it and to immediately reimpose price controls.
Akunis said, "The worrying figures raised by the study depict a problematic picture of out-of-control prices. The lifting of price controls on diesel has failed due to market failure because no natural and real competition was created. The losers are the consumers. This must stop."
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2011
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