Israel’s Transport Ministry said Transport Minister Miri Regev is working with the Finance Ministry to cancel the automatic annual indexing of public transport fares to inflation, a move meant to prevent future price hikes and could freeze fares altogether. The announcement comes only months before the elections, amid ongoing tensions between the two ministries over how the transport budget should be financed, including disputes over a congestion tax.
Under the current mechanism, fares are recalculated every June according to a formula based on Central Bureau of Statistics data, including the consumer price index, diesel prices, average wages and the dollar exchange rate. In theory, the system can also lower fares if input costs fall enough, but in Israel it has never actually produced a fare cut, so in practice it has only been used for increases.
The ministry said the planned rise was intended to help fund expanded service and operations, and without it it is unclear where the money would come from. Public transport is already subsidized by the state at about 12 billion shekels a year. Scrapping the automatic adjustment would require a new government decision or changes to the regulations and budget agreements on which it is based, so the Transport Ministry cannot do it on its own.
At the same time, the ministry published for public comment a postponement of the fare update that had been due to take effect on July 1. Regev and Finance Minister Bezalel Smotrich already agreed at the end of 2025 that fares would not rise during 2026, after prices went up by about 33% in 2025, partly to finance the “Tzedek T’vachti” transport reform, which offers discounts to 3 million riders but has low uptake.
