In Israel, gasoline price may exceed 9 shekels per liter — Jerusalem Post

In Israel, the price of 95-octane gasoline may exceed 9 shekels per liter after the expiration of a temporary fuel tax reduction. The benefit, introduced by Finance Minister Bezalel Smotrich, is set to end on November 3 — after the elections.

Tax benefit and oil prices

As The Jerusalem Post reports, Smotrich last month temporarily reduced the state excise tax on gasoline by 1 shekel per liter to curb price growth ahead of the elections.

The relevant order initially provided for a tax reduction of half a shekel per liter. The minister later doubled the benefit due to rising global oil prices. Under normal conditions, taxes account for more than 60% of the price of gasoline in Israel and provide the state with about 20 billion shekels in revenue per year.

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Possible increase in the coming days

According to the budget department of the Ministry of Finance, tax relief over the past two months will reduce state revenues by approximately 467 million shekels. This is happening amid record defense spending related to the war.

Even if the benefit is extended, gasoline is expected to rise in price by about 30 agorot per liter — to more than 8 shekels. Expectations of a new round of hostilities involving Israel, the United States, and Iran have already raised oil prices by about 10% compared with the end of September.

The final price is to be determined at the end of the week, taking into account the cost of oil in the Mediterranean basin. According to the publication, the new price may remain in effect for only a few days.