Fuel Prices to Drop by Half a Shekel Per Liter Overnight
Translated & summarized from Bizportal by baba
The story in 5 lines · by baba
- Gasoline prices in Israel will drop by 0.50 shekels to 7.77 per liter.
- The price reduction is due to a further cut in excise tax.
- The new price is effective from Sunday night and valid until October 31st.
- The measure was approved by Finance Minister Bezalel Smotrich.
- This is the second tax reduction on fuel in about a month.
The price of gasoline in Israel is set to decrease by half a shekel per liter at midnight, falling from 8.27 shekels to 7.77 shekels. This reduction is due to a further cut in excise tax, and the new price applies to 95-octane self-service gasoline, including VAT. The change is effective from the night of Sunday, October 5th, and the benefit is valid until the end of October.
Minister of Finance Bezalel Smotrich signed the order for the tax reduction after receiving legal approval to proceed with the measure during the election period. For drivers, the savings will be directly reflected at the pump. For example, purchasing 40 liters will now cost 310.80 shekels instead of 330.80 shekels, a saving of 20 shekels. A 50-liter fill-up will cost 388.50 shekels, down from 413.50 shekels.
This latest reduction follows a previous cut of half a shekel implemented on September 7th, which brought the price down to 7.75 shekels. The current price of 7.77 shekels is nearly back to that level, with only a two-agora difference. The price had risen in early October to 8.27 shekels despite the earlier tax break, due to an approximate 13% increase in international oil prices and a 3% strengthening of the dollar against the shekel. The combination of these factors increased the cost of gasoline in shekels more than the September tax reduction had offset.
The excise tax reduction allows for lower fuel prices without waiting for global price drops, as it involves the state foregoing tax revenue. The first reduction was estimated to cost the state around 310 million shekels for September and October, with the new cut expected to add another 150 million shekels, totaling approximately 460 million shekels. Finance Ministry professionals reportedly opposed the additional reduction due to its impact on state revenue and the budget.
The current temporary tax reductions are set to expire at the end of October. If they are not extended, the tax component of gasoline prices will increase. The price for November will also be influenced by international oil prices and the dollar exchange rate at the time of calculation, meaning the current price drop does not guarantee a similar price next month.
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