Israel Gasoline Price May Reach 9 Shekels After Election Vote

Fuel costs in Israel are nearing a critical threshold as elections approach. A temporary tax reduction is scheduled to expire this week.

The current price for 95-octane gasoline stands at NIS 7.77 per liter. Finance Minister Bezalel Smotrich implemented a tax cut last month to prevent prices from spiking before the vote. An earlier order had lowered the excise tax by half a shekel per liter, but Smotrich doubled that reduction to NIS 1 as global oil prices climbed.

The tax break is set to end on November 3. Analysts expect the first price increase to occur as early as Saturday night. This timing coincides with a roughly 10% rise in oil prices since late September. That increase follows expectations of a third round of conflict involving Israel, Iran, and the United States.

Taxes typically account for more than 60% of the price of gasoline in the country. The Finance Ministry’s Budget Department estimates that the reductions over the past two months will cost the state approximately NIS 467 million. This financial impact arrives as defense spending reaches record levels due to the ongoing war.

Smotrich must decide whether to extend the relief after the elections. If the current government is unlikely to remain in power, he may allow prices to rise sharply, leaving the economic burden to the next administration. Without the tax cut, the price could climb above NIS 9 per liter.

Even if the reduction remains in place, gasoline is expected to rise by about 30 agorot per liter. That would bring the price to just over NIS 8. The final price will be determined based on oil costs in the Mediterranean basin toward the end of the week. The new rate may only remain in effect for a few days.