The price of 95 octane gasoline is set to hit an all-time high of NIS 8 per liter at midnight on Wednesday, February 29, due to the crisis with Iran, which is boosting the price of oil. The price of gasoline will rise likely by NIS 0.30 per liter.
The price of self-service 95 octane gasoline for March will likely be set at NIS 7.76 per liter, the price of full-service gasoline will reach NIS 7.97 per liter, including the NIS 0.21 per liter service charge.
The Ministry of Energy and Water Resources will set the price of gasoline on Tuesday, based on the price of gasoline is based on the average quotes of CIF La Vera trade prices for fuels in the Mediterranean basin, which are then converted from dollars into shekels, for two previous days.
The pending price hike will bring the rise in the price of gasoline to NIS 0.65 per liter so far this year, following the NIS 0.12 per liter hike in January, and the NIS 0.23 hike in February. The price hikes are driven by the jump in the price of oil, which reached $110 per barrel on Friday. In 2008, when the price of oil spiked at $140 per barrel, the price of gasoline in Israel was NIS 7 per liter.
The reason for the higher contemporary price of gasoline is the higher taxes - VAT and excise - which account for over half the consumer price of gasoline. The excise, now at NIS 2.95 per liter, was raised by NIS 0.20 per liter in 2010, and is fully linked to the Consumer Price Index (CPI). On September 1, 2011, the government cut the fuel companies' marketing margin by NIS 0.19 per liter, and canceled an excise hike scheduled for January, in an unsuccessful attempt to stem the rising price of gasoline.