Israel Faces Rising Fuel Prices Amid War and Economic Strain
Translated & summarized from Arab48 by baba
Israel is set to see a significant increase in gasoline prices by the end of October due to global oil market pressures and the economic burden of the ongoing war. The government's current subsidies are delaying the full impact, which is expected to hit the public after the elections.
The story in 5 lines · by baba
- Gasoline prices in Israel to rise to 8.77 shekels per liter by late October.
- Global oil price hikes are driven by Gulf tensions and supply disruptions.
- Israel's foreign debt has surged to 400 billion shekels for war financing.
- Public will face war's full economic costs after upcoming elections.
- Government subsidies are temporarily masking higher fuel costs.
Escalating tensions in the Gulf, attacks on oil exports via the Strait of Hormuz, Houthi assaults on Saudi oil pipelines, and refinery shortages in the Middle East and Russia have collectively driven up global oil prices. In Israel, this has coincided with a rise in the dollar's exchange rate against the shekel.
Effective Thursday, the price of a liter of gasoline will stabilize at 8.27 shekels, following a government subsidy and fuel tax reduction decision by Finance Minister Bezalel Smotrich. However, "TheMarker" newspaper reported on Wednesday that the price is expected to climb to 8.77 shekels by the end of October, after the upcoming elections.
Israel is already ranked among the world's most expensive countries in most sectors, holding the seventh position globally for oil prices even before this upcoming increase. The newspaper noted that government subsidies on fuel prices during complex security situations, like the current one in Israel, effectively postpone the public's payment for the war's costs and future price hikes on gasoline and other goods.
The Israeli government has increased its foreign debt to approximately 400 billion shekels to finance the war, a debt that will need to be repaid in the future as it cannot be covered by the current state budget. According to "TheMarker," the Israeli public has not yet begun to bear the true economic costs of the war, which are expected to manifest after the elections. The next government will face the challenge of reducing the debt-to-GDP ratio and determining the security budget for the coming years, likely necessitating tax increases and cuts to social services like healthcare and education.
