Gasoline Could Hit 9 Shekels in Israel
A tax cut expiring November 3 and a 10% spike in oil prices threaten to push fuel costs to record highs.
By Emma Foster ·
Israeli drivers may see the price of 95-octane gasoline exceed 9 NIS per liter in the coming days. The current cost stands at 7.77 NIS. A temporary tax reduction set to expire on November 3 is the primary driver of the projected increase.
Finance Minister Bezalel Smotrich implemented the tax cut last month to stabilize costs before the national elections. An initial order signed the previous month lowered the excise tax by 0.50 NIS per liter. As global oil prices climbed, Smotrich doubled that reduction to 1.00 NIS. The measure was designed to shield consumers from volatility during a critical political period.
Taxes typically account for more than 60% of the final pump price in Israel. The state collects approximately 20 billion NIS annually from fuel levies. The Finance Ministry’s Budget Department estimates the reductions over the past two months will cost the government 467 million NIS. This expenditure occurs while defense spending reaches record highs due to the ongoing war.
Global oil markets have risen by about 10% since late September. The Energy Ministry’s Fuel Administration set the October gasoline price during a period of lower volatility. Expectations of a third round of conflict involving Israel, Iran, and the United States have since pushed crude prices higher. The Finance Ministry must now decide whether to extend the tax relief after the vote.
If Smotrich allows the cut to lapse, the price could surpass 9 NIS per liter. Should he extend the relief, the price is still expected to rise by 30 agorot per liter. That adjustment would place the cost just above 8 NIS. The minister may choose to let prices surge if the current government is unlikely to retain power, shifting the economic burden to the next administration.
The first price increase is anticipated as early as Saturday night. The final rate will be determined based on Mediterranean oil prices at the end of this week. The new price may remain in effect for only a few days before the next adjustment cycle begins.
Source: The Jerusalem Post
