Prime Minister Benjamin Netanyahu said Wednesday that the planned rise in electricity prices will not reach 8%, as initially announced, thus mitigating the projected hike in the cost of living in Israel in 2019.
Moreover, the prices of regulated dairy products are expected to go up on Jan 1. by 2%–5%, regulated bread prices will rise by 3.5%.
Last week's announcement prompted several goods and services conglomerates to announce that they, too, would be raising prices.
The move triggered a series of "yellow vest" demonstrations, inspired by the riots in Paris. Protest leaders have called for a consumer boycott of several food giants, most prominently Osem and Strauss, two of the largest food manufacturers and distributors in Israel, which were the first to announce a price hike.
Addressing the public uproar on Wednesday, Netanyahu said, "The price of electricity is significantly lower than in Europe and I tell you that it will not rise 8%. I don't know by how much it will rise but a few percents in the worst case."
Netanyahu said electricity costs have dropped by 15% since 2013 after the Tamar natural gas field off Israel's Mediterranean coast became operational. He said the larger Leviathan gas field, slated to start production in a year, would lower electricity rates further.
The Finance Ministry said on Wednesday it had taken steps to curb the expected price hikes.
Finance Minister Moshe Kahlon said he met with top Osem and Strauss officials, who have agreed to postpone the move.
"As I promised, I am pleased to announce that the current surge in prices has been halted. The Israeli public should not bear unjustified price hikes. The Finance Ministry will continue to act to reduce the cost of living in every field, as we have done in the past four years."
Osem, which had planned a 4.5% price hike, said in a statement that it was shelving the move following Kahlon's promise to the company to examine the cancellation of tariffs on a series of raw materials it uses for its production operations.
