Israel fuel prices could top NIS 9 per liter as tax cut expires after elections
Rising global oil prices amid expectations of renewed fighting with Iran, coupled with the expiration of Smotrich's fuel tax cut on November 3, are expected to drive fuel prices sharply higher.
Israel's fuel prices are poised to climb significantly following the November 3 elections, as a temporary tax cut introduced by Finance Minister Bezalel Smotrich expires. The reduction, which lowered the excise tax on gasoline by NIS 1 per liter, is set to end, pushing the price of 95-octane gasoline above NIS 9 per liter from its current level of NIS 7.77. Smotrich implemented the temporary cut to curb rising fuel costs ahead of the vote.
The temporary reduction, initially a half-shekel per liter decrease, was doubled due to soaring global oil prices and the looming possibility of renewed conflict between Israel, the US, and Iran. Taxes typically account for over 60% of gasoline prices in Israel, generating approximately NIS 20 billion in annual state revenue. However, the tax cuts implemented in the past two months are projected to shave off around NIS 467 million in revenue, coinciding with a record defense budget due to the ongoing war.
Following the election, Smotrich will face a decision on whether to extend the tax relief. If it becomes clear the current government will not continue, he may allow fuel prices to soar, leaving the incoming administration to manage the economic fallout. Even if the tax cut endures, the first price hike is anticipated to occur by Saturday night. The final price will be set by the end of the week, influenced by oil prices in the Mediterranean basin, potentially remaining in effect for just a few days.
Written by urgent.news from Jerusalem Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
