Israeli Fuel Prices Set to Drop Significantly Ahead of High Holidays

Israeli drivers can expect a notable fuel price reduction during the night between Monday and Tuesday, with prices falling by approximately 25 agorot per liter. This decrease will bring the cost of a liter of 95-octane gasoline at self-service stations down to about 7.84 shekels, returning below the eight-shekel mark. The final price will be confirmed on Sunday morning. This price drop follows a sharp increase in early August, when fuel prices surged by 61 agorot (8.2%) to 8.09 shekels per liter, the highest since September 2012. Full-service fuel prices reached 8.34 shekels, while in Eilat, self-service prices were set at 6.85 shekels per liter.

Fuel prices in Israel are determined based on the average price of oil in the Mediterranean region over the last five days of the month, combined with the dollar exchange rate at the time of the new price announcement. The expected reduction translates to a savings of 12.5 shekels for drivers filling a 50-liter tank, and about 50 shekels monthly for those refueling four times. The price drop is linked to a decline in Brent crude oil prices, which currently stand at around 87 dollars per barrel, about 10% lower than at the end of July. Meanwhile, the dollar exchange rate has risen to approximately 3.97 shekels, up from 3.07 shekels at July's end.

Despite the upcoming price cut, the sharp fuel price increase in August is expected to impact the consumer price index for that month, potentially pushing it close to a full percent. This inflationary pressure may influence the Bank of Israel's decision on interest rate cuts, with a decision scheduled for the upcoming Tuesday.