Israel Fuel Prices Drop Sharply Then Rise Slightly in November

Drivers in Israel are set to experience unusual volatility at the gas pumps this November, influenced by global trends and last-minute tax decisions. Minister of Finance Bezalel Smotrich signed an order extending a reduction in fuel excise tax for another month, preventing a record high price for gasoline that could have exceeded 8.30 shekels per liter.

At the start of November, consumers will see a significant drop. From November 1st, the price of a liter of 95-octane gasoline at self-service stations will fall by 42 agorot to 7.35 shekels, a 5.4% decrease from the previous 7.77 shekels. This relief is attributed to a sharp 13.2% decline in global oil and gasoline prices, which offset a 2% strengthening of the US dollar against the shekel. The global price drop accounted for about 36 agorot of the reduction, with an additional six agorot coming from a VAT adjustment.

However, this relief will be short-lived. On November 5th, a more substantial excise tax reduction mechanism that was in place for previous months will end. Without Smotrich's new order, the full tax would have been reinstated, pushing the price to a record 8.35 shekels per liter. Smotrich's intervention will only partially reduce the excise tax, leading to a price increase to 7.85 shekels per liter on November 5th.

The current order is valid for one month, until December 5th. At that point, the Ministry of Finance will again need to decide whether to allocate funds to mitigate energy prices or allow gasoline prices to align with full tax rates. For drivers, this means a brief window to refuel at a significantly lower price before the expected increase later in the week.