Israel Faces Significant Fuel Price Hike in November

Drivers in Israel are bracing for a potential sharp increase in gasoline prices at the beginning of November. The price per liter could approach nine shekels once a temporary tax reduction expires. The Ministry of Finance, led by Minister Bezalel Smotrich, is discussing options to extend the reduced fuel excise tax. The current tax reduction is in effect until November 4th, meaning that without government intervention, prices will rise on November 5th. Preliminary estimates suggest that the price of a liter of gasoline will climb to at least 8.77 shekels after the tax break ends. Depending on global market conditions and currency exchange rates, the price could reach as high as 8.90 shekels.

The Ministry of Finance is exploring several strategies to mitigate this price surge. One possibility is a full extension of the existing tax relief, though this would incur substantial costs for the state treasury. The ministry estimates that each shekel of excise tax reduction costs the budget approximately 300 million shekels. An alternative compromise being considered is a partial reduction, lowering the excise tax by 50 agorot instead of a full shekel. Minister Smotrich has tasked specialists with analyzing price trends, global market shifts, and the budget's capacity before a final decision is made. While subsidized prices remain in place until November 4th, the situation thereafter is uncertain. State spending on fuel price support has already reached nearly 500 million shekels since the reductions began, and further extensions would necessitate finding additional funding sources.