Fuel Prices to Dip Briefly Before Rising Sharply to 7.85 Shekels Per Liter
Translated & summarized from Alarab by baba
Fuel prices in Israel will temporarily drop to 7.35 shekels per liter on Saturday, October 31, 2026, before rising to 7.85 shekels by Thursday, November 5, due to reduced tax subsidies. High land costs and licensing issues limit competition, allowing major companies to maintain high prices, while smaller stations in peripheral areas offer lower rates. The price hikes are expected to increase transportation costs, potentially leading to higher prices for goods and services.
The story in 6 lines · by baba
- Fuel prices will temporarily fall to 7.35 shekels per liter on Saturday before rising to 7.85 shekels by Thursday.
- The price changes are linked to a reduction in the fuel tax subsidy to half a shekel per liter.
- High land costs and lengthy licensing processes contribute to limited competition among fuel companies.
- Smaller fuel stations in peripheral areas tend to offer more competitive prices than major companies.
- Rising fuel costs are expected to increase transportation expenses and potentially lead to higher prices for goods.
- Some drivers may reduce vehicle use and opt for public transportation due to escalating fuel expenses.
Fuel prices in Israel are expected to decrease temporarily starting Saturday night, October 31, 2026, before climbing again to 7.85 shekels per liter by Thursday, November 5. This fluctuation is attributed to anticipated changes in the tax reduction on fuel. Initially, the price per liter will drop from 7.77 shekels to 7.35 shekels, a decrease of 42 agorot, but this relief will be short-lived.
The upcoming price hike is linked to a reduction in the tax subsidy to only half a shekel per liter. This comes amid already high fuel costs in recent months, which have strained household budgets. The situation also raises questions about why major fuel companies maintain maximum prices despite their capacity to offer discounts.
Experts point to several factors contributing to the lack of competition and high prices. Dr. Amit Mor, Director General of an economic consulting firm and lecturer at Reichman University, cites the high cost of land and lengthy licensing processes for new gas stations in central areas, limiting supply relative to the growing number of vehicles. Smaller companies, often located in peripheral areas with lower land costs, tend to offer more competitive prices.
Madhi Rayan, owner of a fuel group with nine stations in the north, explains that while lower prices reduce profit per liter, they significantly increase customer volume. He notes that his group's strategy, established in the 1990s, focuses on personal service and below-market prices, with profits derived more from ancillary services like convenience stores and car washes rather than fuel sales alone.
Industry insiders warn that the anticipated price increase could lead to a noticeable drop in fuel consumption, with some drivers considering alternatives like public transport. The rising fuel costs also threaten to trigger a broader price increase across various economic sectors, including food, due to increased transportation and logistics expenses. Bus and taxi companies may also face pressure to raise fares or seek additional government support.
