Israel Faces Record Fuel Prices Amid Global Crisis, Government Considers Subsidies

Fuel prices in Israel are set to surge to a new record high, with the Ministry of Energy and Infrastructure announcing a significant increase in regulated fuel products. This impending price hike is expected to further strain the budgets of Israeli drivers.

In response to the anticipated rise, Finance Minister Bezalel Smotrich convened an emergency meeting and directed his ministry's professional staff to explore additional subsidies for gasoline. The aim is to mitigate the impact of the global energy crisis on consumers and prevent inflationary pressures, according to Smotrich, who views the measure as supportive of economic growth.

The price of a liter of 95-octane self-service gasoline is projected to increase by 52 agorot, reaching a record 8.27 shekels, starting Wednesday night. This comes shortly after a 50-agora reduction in excise duty per liter earlier in the month, a move approved under special election-period circumstances despite professional opposition within the Finance Ministry. Without that prior reduction, the price would have reached 8.77 shekels.

The current price increase is attributed to international factors, including a roughly 13% rise in global gasoline prices and a 3% strengthening of the dollar, which have effectively nullified the previous price reduction. To implement further subsidies, the Finance Ministry faces two main challenges: securing additional legal approval during the election period and managing the substantial cost to the state treasury, estimated at approximately 155 million shekels per month for the previous reduction.