Fuel Prices in Israel Set to Hit Record High in October

The price of gasoline in Israel is set to surge by 52 agorot per liter in October, reaching a new record of 8.27 shekels for a liter of 95-octane self-service fuel. This marks an increase from the current price of 7.75 shekels and will take effect at midnight between Wednesday and Thursday, October 1st. The additional charge for full-service fueling will remain unchanged at 26 agorot per liter.

This price hike, a 6.7% increase, occurs even with a fuel excise tax reduction, promoted by Finance Minister Bezalel Smotrich, still in effect. In early September, gasoline prices had already reached a 14-year high of 8.25 shekels per liter. However, on September 7th, the excise tax was lowered, reducing the price by 50 agorot to 7.75 shekels, a measure intended as temporary until the end of October.

Within less than a month, the rise in energy prices has pushed the gasoline cost to just 2 agorot below the pre-tax-reduction September peak. According to the Ministry of Energy and Infrastructure, the primary drivers for this increase are a roughly 13% rise in international gasoline prices, attributed to climbing oil costs and concerns over supply disruptions and global energy market stability. Additionally, the dollar has strengthened by approximately 3% against the shekel, further contributing to the price increase in Israel.

The international gasoline component will account for about 3.13 shekels per liter in October, an increase of 44 agorot from the previous calculation. The excise tax will be approximately 3.23 shekels per liter, and value-added tax (VAT) will be around 1.26 shekels, an 8 agorot increase. Together, excise tax and VAT constitute about 54% of the final price paid by drivers at the pump.