Fuel Prices Set to Surge Again in Israel After Recent Reduction

Israeli drivers are bracing for another increase in gasoline prices, with the cost of a liter of 95-octane fuel expected to rise by more than 40 agorot (about $0.11) in the upcoming October update. This would push the price back above the 8 shekel threshold, erasing much of the relief drivers experienced last month. The final price will be determined in the coming days by the Ministry of Energy and Infrastructure, which calculates the maximum price based on Mediterranean fuel costs, the dollar exchange rate, marketing expenses, fuel excise tax, and VAT.

In early September, the price of gasoline reached 8.25 shekels per liter. In response, Finance Minister Bezalel Smotrich signed an order for a temporary 50 agorot per liter reduction in the fuel excise tax, lowering the maximum price to 7.75 shekels. Despite this reduction remaining in effect, rising global oil prices and other factors in the calculation formula are now projected to cause a significant price hike.

If the current forecast holds true, a 40 agorot per liter increase would mean an additional cost of approximately 20 shekels for drivers filling a 50-liter tank. Beyond the direct impact on motorists, the anticipated rise in fuel costs could also lead to increased transportation and shipping expenses, potentially affecting the prices of various goods and services across the economy.