Israel Raises Regulated Fuel Prices Above 8 Shekels Per Liter in August

The Fuel and Gas Administration at Israel's Ministry of Energy and Infrastructure announced a sharp increase in regulated fuel prices effective midnight between Saturday and Sunday, August 2, 2026. The maximum retail price for a liter of 95-octane unleaded gasoline at self-service stations will rise to 8.09 shekels, up 61 agorot from the previous update. The surcharge for full-service remains unchanged at 25 agorot per liter. This increase is driven by rising global fuel prices, influenced by high crude oil costs and disruptions in Russian refining capacity due to Ukrainian attacks, alongside a strengthening US dollar against the shekel over the past month.

Fuel prices in Israel are largely composed of taxes, notably an excise tax currently at 3.61 shekels per liter. However, monthly price adjustments mainly reflect international fuel costs in the Mediterranean region, affected by three key factors: Brent crude oil prices rising to nearly 100 dollars per barrel, increased refining margins between crude oil and refined products like gasoline, and the dollar's appreciation from 2.98 shekels per dollar at the end of June to a higher current rate. Dr. Ilan Gildin, hedge fund manager and family office partner, explained that Ukraine has destroyed 40 to 50 percent of Russia's refining capacity, with Russia exporting over 10 percent of the world's diesel. This has caused a global refining crisis, compounded by the long-term lack of new refinery construction due to the heavy infrastructure and environmental challenges involved.

These combined factors have pushed fuel prices in Israel to historically high levels. The Ministry's announcement underscores the ongoing impact of geopolitical tensions and global market dynamics on local fuel costs.