Israeli Fuel Prices Expected to Drop Below Eight Shekels Per Liter Before Tishrei Holidays

Israeli consumers are set to benefit from a significant fuel price reduction starting Monday at midnight, ahead of the Tishrei holidays. The drop, estimated at around 25 agorot per liter, will bring prices back below eight shekels for self-service 95-octane gasoline. This follows a period of heightened tension in the Strait of Hormuz in early August, which had pushed fuel prices up by 8.2%, or 61 agorot, reaching a peak of 8.09 shekels per liter, the highest since September 2012. Full-service prices had risen to 8.34 shekels, while prices in Eilat were set at 6.85 shekels per liter for self-service.

The expected price decrease to approximately 7.84 shekels per liter will be finalized on Sunday morning, based on the average price of Brent crude oil in the Mediterranean region over the last five days of the month and the dollar-shekel exchange rate at the time of the new price announcement. Brent crude currently trades around 87 dollars per barrel, about 10% lower than at the end of July. The dollar exchange rate stands near 3.97 shekels, a 3% decrease from 3.07 shekels at July's end.

This reduction translates to a savings of roughly 12.5 shekels per 50-liter tank fill-up, and about 50 shekels monthly for drivers who refuel four times a month. The sharp fuel price increase in August contributed to pushing the consumer price index close to a full percent, significantly impacting inflation rates. This inflation surge may influence the Bank of Israel's decision on Tuesday, potentially preventing a third consecutive interest rate cut.