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

Fuel prices in Israel are expected to jump significantly next week, potentially exceeding 8 shekels per liter. The current forecast indicates an increase of over 40 agorot, though the final price will be determined at the end of the month. This anticipated rise is attributed to escalating global oil prices, driven by geopolitical tensions including the conflict with Iran and Houthi actions in the Bab al-Mandab strait, as well as tensions 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 projected increase means consumers may still face a new price ceiling.

The government faces a decision on whether to extend the fuel subsidy. Finance Minister Bezalel Smotrich may opt to expand the discount to prevent the price from crossing the 8 shekel threshold, especially with elections potentially looming within a month. This would be a departure from previous promises regarding fuel prices.