Fuel Prices Set to Soar Past NIS 8 Per Liter Next Week

The price of gasoline in Israel is expected to rise sharply next week, potentially exceeding 8 Israeli shekels per liter. Analysts predict an increase of over 40 agorot (cents), though the final price will be determined at the end of September. This surge is attributed to rising global oil prices, fueled by tensions with Iran and the Houthi control of the Bab al-Mandab strait, as well as broader geopolitical friction between Russia and Europe.

This upcoming price hike will likely negate almost entirely a 50 agorot per liter discount that the government implemented at the beginning of the month. The subsidy, costing the economy approximately 300 million shekels, was intended to prevent record-high fuel prices. However, the anticipated increase means consumers may not benefit from the government's intervention.

The situation puts pressure on Finance Minister Bezalel Smotrich, who may need to decide whether to extend the fuel subsidy to prevent prices from reaching an all-time high. Such a move could be politically significant, especially with elections potentially looming within a month, as the government aims to avoid facing voters with record fuel costs despite previous promises.