Israeli Gasoline May Exceed NIS 9 Per Liter After Election Vote
The expiration of a temporary tax cut combined with rising global oil costs could drive fuel prices to their highest levels in recent years.
By Gabriela Flores ·
Drivers in Israel face a potential spike in fuel costs immediately following the upcoming elections. The temporary reduction in excise tax on gasoline is scheduled to end on November 3, a deadline that aligns with a period of rising global oil prices. Analysts predict this convergence could push the price of 95-octane gasoline above nine shekels per liter, a level significantly higher than the current price of seven shekels and seventy-seven agorot.
Finance Minister Bezalel Smotrich implemented the tax cut last month to stabilize prices before the vote. An initial order signed a month prior had reduced the tax by half a shekel per liter. In response to rising oil costs, the minister doubled the reduction to one shekel per liter. Under standard conditions, taxes account for more than 60% of the final price of gasoline in Israel, generating approximately 20 billion shekels in state revenue annually.
The Finance Ministry’s Budget Department estimates the two-month tax relief will cost the state roughly 467 million shekels. This expenditure occurs while the ongoing war has driven defense spending to record highs. After the election, Smotrich must determine whether to extend the relief. If the current government is set to lose power, he may allow prices to rise, transferring the economic burden to his successor.
The first price increase is expected as early as Saturday night. The Energy Ministry’s Fuel Administration set the October price in late September, but expectations of a third round of conflict involving Israel, Iran, and the United States have since lifted oil prices by about 10%. This market shift drives the immediate cost increase regardless of the tax policy outcome.
If the tax cut remains in place, gasoline is projected to rise by approximately 30 agorot per liter, bringing the price just over eight shekels. If the reduction lapses on schedule, the price could climb above nine shekels. The final price will be determined based on oil prices in the Mediterranean basin toward the end of this week.
The new price may remain in effect for only a few days. This short duration reflects the volatility in the energy market and the uncertainty surrounding the post-election political landscape in Israel.
Source: The Jerusalem Post
