Fuel Prices in Israel Expected to Drop Slightly in September, Not Significantly

Fuel prices in Israel are anticipated to decrease at the beginning of September, but the reduction will likely be less than earlier optimistic estimates. Initial reports suggested a possible cut of about 25 agorot per liter, which would lower the price of 95-octane self-service gasoline from 8.09 shekels to approximately 7.84 shekels per liter. However, updated forecasts indicate the price will remain close to the 8-shekel mark.

This moderation is due to opposing factors affecting the price. On one hand, the Israeli shekel has strengthened against the US dollar and global oil prices have softened, both of which tend to reduce fuel costs. On the other hand, refining margins have sharply increased, offsetting much of the potential price drop.

Yoni Penning, chief strategist at Mizrahi Tefahot's trading room, explained to Maariv that wholesale gasoline prices used to set retail prices were sampled recently when they were slightly higher. According to Mizrahi Tefahot's updated forecast, if current conditions persist through the end of the month, the price of 95-octane gasoline will be set near 8 shekels per liter, including VAT and excluding service fees.

Even if the price cut is smaller than initially expected, it is still expected to help moderate price increases in September. However, due to uncertainty in refining margins, the current forecast remains cautious.