Israeli Gasoline Prices Expected to Surge Above 8 Shekels per Liter in August

Gasoline prices in Israel are projected to rise at the beginning of August due to increasing global energy costs and the recent weakening of the Israeli shekel. The final price will be determined later this month based on the fuel and gas administration's pricing formula, which factors in Mediterranean fuel prices, excise tax, VAT, and marketing expenses. A key influence is the exchange rate of the dollar; as the shekel weakens, fuel prices in shekels increase even if the dollar price remains stable, creating dual upward pressure on pump prices.

Industry estimates suggest that self-service gasoline prices could return to approximately 8.05 to 8.07 shekels per liter, levels last seen in April and May. This anticipated price hike is expected to have broader economic effects, potentially increasing the cost of living. Elevated energy prices may lead to higher transportation, production, and service costs, contributing to a rise in the consumer price index. Consequently, the price increase at gas stations could also impact inflation rates and influence upcoming interest rate decisions.