Gasoline Prices Expected to Drop in Israel by September After August Spike
Following a sharp increase in gasoline prices to 8.09 shekels per liter in August, analysts at Mizrahi Tefahot Bank predict a significant price reduction to around 7.70 shekels per liter by September. This forecast is based on several key factors: the strengthening of the Israeli shekel, a decline in Brent crude oil prices, and a contraction in refining margins.
In early August, gasoline prices rose by 61 agorot per liter due to surging international fuel prices and a stronger US dollar. However, since then, Brent crude oil prices in shekel terms have fallen from approximately 280 shekels per barrel to about 250 shekels, representing a more than 10% drop in raw material costs. Additionally, refining margins, which reflect the difference between crude oil prices and refined fuel product prices, have narrowed to about 20 dollars per barrel, further supporting potential price decreases.
The recent decline in European natural gas prices, currently around 14 dollars per MMBtu, may also contribute to lower refining costs. The combined effect of these factors leads Mizrahi Tefahot to anticipate a price correction in September, which would reverse much of the August increase. This development comes amid ongoing regional tensions, including the conflict with Iran, which continue to influence energy markets.
The expected price drop will provide relief to Israeli drivers after the recent surge in fuel costs, reflecting the dynamic interplay of currency strength, global commodity prices, and refining economics.
