Israel to Cut Fuel Prices by Half Shekel After Record Highs

Israel's Ministry of Finance announced Thursday that the legal counsel has determined there are no impediments for Finance Minister Bezalel Smotrich to approve a reduction in gasoline prices for the upcoming month. Smotrich intends to sign off on a 50 agorot (half shekel) per liter discount for one month, pending public feedback. This planned reduction follows a similar 50 agorot cut implemented last month.

The move comes after the price of gasoline surged by 52 agorot, bringing the cost of a liter of 95-octane self-service gasoline to a record high of 8.27 shekels, surpassing the previous record of 8.25 shekels.

The recent price hikes are attributed to global increases in oil prices, influenced by tensions with Iran, disruptions by the Houthis in the Bab al-Mandab strait, and the ongoing war between Russia and Ukraine. The Ministry of Energy explained that international gasoline prices rose by approximately 13%, coupled with a roughly 3% strengthening of the dollar against the shekel, both contributing to the higher fuel costs in Israel.

Earlier this month, excise duty on fuel was reduced by 50 agorot per liter, an initiative estimated to cost the economy around 300 million shekels. Following the announcement of the record fuel price increase, Smotrich convened a meeting with Ministry of Finance professionals to explore options for mitigating the full impact of the rise. With the legal clearance now obtained, the additional discount is expected to proceed after the necessary administrative steps are completed.