Israel's Finance Ministry Legal Counsel Finds No Obstacle to Fuel Price Reduction

Fuel prices in Israel, which reached an all-time high overnight, are expected to decrease in the coming days. This follows a legal opinion from the Finance Ministry's legal counsel stating there is no legal impediment to the reduction plan, which is being advanced by Finance Minister Bezalel Smotrich. The proposed price cut still requires approval from the Attorney General, Gali Baharav-Miara, who is expected to consider the Finance Ministry's legal stance.

Once approved by the Attorney General, Smotrich's order to reduce the tax by half a shekel per liter of gasoline will be published for public comment. It is anticipated to take effect next week and remain in place for one month. The price of a liter of 95-octane unleaded gasoline at self-service stations (including VAT) rose overnight to a maximum of NIS 8.27, an increase of 52 agorot from the previous update. An additional charge for full service remains unchanged at 26 agorot per liter.

The Fuel and Gas Administration attributes the price hike to global energy market developments. The current price includes a 50-agora per liter reduction in excise tax, which was implemented temporarily and is set to expire at the end of October 2026. The recent increase stems from a roughly 13% rise in international gasoline prices, driven by escalating global oil costs and concerns over supply disruptions and energy market stability. A nearly 3% strengthening of the dollar against the shekel also contributed to the higher fuel cost in Israel.

This development follows a previous instance in early September when Smotrich signed an order to lower fuel prices by 50 agorot per liter. That measure was approved by the Attorney General despite opposition from professional staff within the Finance Ministry who feared it was politically motivated due to its proximity to elections. The legal opinion from the Finance Ministry's counsel, Koppel, was first reported by Kan News.