Israel cuts fuel tax as gasoline prices hit record high

Israel’s Finance Minister Bezalel Smotrich has announced a two-month reduction in the fuel excise tax to combat record-high gasoline prices resulting from U.S.-Iran tensions. Energy Ministry adjustments to gasoline prices took effect on September 1, with the price per liter spiking to an all-time high of 8.25 shekels ($2.74), equivalent to $10.41 per gallon.

The excise tax, or "blu tax," accounts for 44% of the price, currently standing at 3.66 shekels per liter. Value-added taxes make up another 15%, while global oil prices represent the remaining 33%. Smotrich reduced the excise tax by 0.5 shekel per liter, lowering the price to 7.75 shekels per liter starting Monday midnight. Brent crude futures hit a record high of $96.28 per barrel on Friday due to Middle East tensions, which raised concerns about global supply.

Israel is not currently involved in recent fighting after agreeing to a ceasefire in April. The Bank of Israel recently decreased its benchmark interest rate by 25 basis points for the third consecutive time to address low and stable inflation.