Prime Minister Benjamin Netanyahu today instructed Minister of Finance Yuval Steinitz and Minister of Energy and Water Uzi Landau to examine progressive differential electricity rate hikes, and spreading the rate hike over a longer period of time, after the Public Utilities Authority (Electricity) approved an 8.9% rate hike on Thursday.
It is not yet clear, which groups would be entitled to cheaper electricity rates but in the frame are large businesses that may either fire workers or raise prices due to higher electricity rates, institutions caring for the sick and elderly, and large families.
At the start of today's meeting of Likud ministers ahead of the cabinet meeting, Netanyahu said, "After we dealt with the rise in apartment prices, and after we saw the initial results of this handling, which resulted in a drop in prices, we should tackle the rise in the price of electricity. The higher price of electricity is due to the sanctions against Iran, which has raised the price of oil. This is not the result of a public dialogue on the sanctions, but a consequence of the sanctions."
Netanyahu did not mention the disruptions in natural gas deliveries from Egypt to Israel Electric Corporation (IEC) (TASE: ELEC.B22), which are the main reason for the electricity rate hike. The IEC wants a 30% rate hike, which the Public Utilities Authority had already decided to spread out over three years.
Steinitz told the Likud ministers, "The current rise in prices was supposed to be much more than 40%, due to the stoppages in natural gas deliveries from Egypt. We decided to forego NIS 1 billion in tax revenues to mitigate the price hike to just 9%. Gas deliveries from Tamar will begin in mid-2013, and the price will begin to fall."
Published by Globes [online], Israel business news - www.globes-online.com - on March 25, 2012
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