Israel Approves Fuel Subsidy to Mitigate Price Hike

Israel's Attorney General has approved a directive from the Finance Minister to subsidize gasoline prices by 50 agorot (cents) per liter for October. This measure aims to soften the impact of a recent surge in fuel costs, which saw prices reach an all-time high of 8.27 shekels per liter at midnight between Wednesday and Thursday. The subsidy will take effect at midnight between Sunday and Monday, bringing the price down to an estimated 7.77 shekels per liter until the end of October.

This marks the second consecutive month of a 50 agorot per liter subsidy. The previous subsidy, which expired at the end of September, had also reduced prices by the same amount. The new subsidized price will be 2 agorot higher than the September subsidized price.

Finance Minister Bezalel Smotrich is expected to sign the order, which will then be published for public comment before becoming official. The Ministry of Energy is awaiting the signed order to announce the final new price.

The government subsidy for October is estimated to cost the state approximately 150 million shekels. Combined with the 155 million shekels spent on the September subsidy, the total cost for these two months leading up to the elections will exceed 300 million shekels for taxpayers.

The recent rise in fuel prices is attributed to a roughly 13% increase in international gasoline prices, driven by rising oil costs and concerns over supply disruptions. Additionally, a 3% strengthening of the US dollar against the Israeli shekel in the past month has contributed to the higher prices in Israel. While a stronger shekel had previously offset global price increases for Israeli drivers, the recent weakening of the local currency has diminished this protective effect.