Fuel Prices Hit Record High in Israel Amid Global Surge

The price of gasoline in Israel will reach an all-time high of 8.27 shekels per liter starting midnight Wednesday, following a 52 agorot increase. This surge is attributed to a roughly 13% rise in global gasoline prices, driven by escalating crude oil costs and ongoing concerns about supply chain disruptions and the fragility of the global energy market. Additionally, the U.S. dollar strengthened by approximately 3% against the Israeli shekel, further contributing to the price hike.

This latest increase occurs less than a month after Finance Minister Bezalel Smotrich intervened to prevent a steeper 60 agorot price jump. Smotrich had approved a temporary reduction in excise tax, lowering the price to 7.75 shekels per liter. This tax reduction was slated to remain in effect until the end of October.

However, the current price hike is happening while the excise tax reduction is still active. This means that despite the government's temporary waiver of part of the fuel excise tax, the global rise in oil prices is rapidly eroding the relief previously provided to drivers. The tax reduction last month aimed not only to ease the burden on drivers but also to mitigate the impact of fuel costs on transportation and distribution expenses, which ultimately affect the prices of goods and services.

With the price climbing again before the tax reduction period concludes, and with the reduction set to expire on October 31st, further price increases are possible in November if global oil prices and the dollar exchange rate continue to rise and the tax cut is not extended.