Fuel Prices Hit Record High in Israel Amid Global Market Shifts

Fuel prices in Israel are set to reach an all-time high starting tonight, with a 16 agorot per liter increase. The maximum price for a liter of 95-octane unleaded gasoline will be NIS 8.25 for self-service, including VAT. The additional charge for full service will also rise by one agora to 26 agorot per liter.

Bat Sheva Abuhazira, director of the Fuel and Gas Administration at the Ministry of Energy and Infrastructure, explained that the price hike is primarily due to a nearly 6% increase in global gasoline prices, partially offset by a 3% drop in the dollar's exchange rate. An update to the excise tax component by the Tax Authority added about 5 agorot per liter, and a semi-annual adjustment to the marketing margin also contributed. The increase in the full-service fee reflects a rise in the minimum wage.

The NIS 8.25 per liter mark for 95-octane gasoline matches the previous record set in September 2012. At that time, following public protests, Prime Minister Benjamin Netanyahu introduced a plan to reduce fuel taxes to ease the burden on drivers. Although these tax reductions were later canceled, they were reinstated in the summer of 2022 when then-Finance Minister Avigdor Lieberman intervened after prices surpassed NIS 8.08.

In early 2024, the current Finance Minister, Bezalel Smotrich, abolished the fuel tax subsidy program, partly due to the widening deficit caused by the ongoing war.