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Israelis Gird for New Price Hikes Following Tax on Fuel

The surprise tax on fuel in Israel that went into effect at midnight Sunday brought no immediate price hikes for industrial and agricultural products but increases are expected nevertheless in the cost of transportation and for certain manufactured goods. Bus companies are expected to be allowed to raise their fares beginning in September and taxis will most certainly follow the buses owing to the increased cost of gasoline, business circles said today. An immediate rise in costs is expected by the construction industry, due mainly to the demand for higher prices made already by truck owners who haul building materials. Although bakeries use fuel, the basic cost of bread will be prevented from rising by treasury subsidies to the industry. But the average Israeli is not subsidized. Today he was paying from ten to 140 percent more for gasoline, kerosine and domestic heating and cooking fuels.