Gas prices to rise 4%, hitting record high

Bus and train ticket prices will go up 2.5% on July 1.

gas station 1 88 224 (photo credit: Ariel Jerozolimski)
gas station 1 88 224
(photo credit: Ariel Jerozolimski)
Global oil prices coupled with the shekel's depreciation against the dollar in June are driving up gasoline prices to a record high of NIS 7 per liter starting on Tuesday, while public transportation fees will cost an additional 2.5 percent. "The rise in gasoline prices for the month is a result of the hike in global oil prices and the depreciation of about 2.5% in the shekel rate against the dollar as well as the change in the excise (gasoline tax) that was revised upward on the basis of the rise in the consumer price index," said Chen Bar Yosef, head of the gasoline division at the National Infrastructures Ministry. Gasoline prices in July will increase by an average of 4% at midnight on Monday. Self-service 95 octane gasoline will cost NIS 7 per liter, up from NIS 6.58, and 96 octane gasoline will cost NIS 7.01 per liter, from NIS 6.60. The service fee for full service remains unchanged at NIS 0.12 per liter. The cost of public transportation is also set to increase by about 2.5% on Tuesday due to the rise in the CPI index over recent months. Back in January, bus and train ticket prices were raised by 1.7% after a long period of stable prices. On June 10, regular taxi fares increased by 7.28%, sherut (minibus taxi) fares, both local and intercity, went up by 13%. Just over a week ago a convoy of hundreds of slow-moving trucks and cabs brought traffic on the Ayalon freeway in Tel Aviv to a halt as drivers protested the rising cost of fuel. OPEC President Chakib Khelil predicted that the price of oil will climb to $170 a barrel before the end of the year, citing the dollar's decline and political conflicts. "Oil prices are expected to reach $170 as demand for fuel is growing in the US during the summer period and the dollar continues to weaken against the euro," Khelil said in a telephone interview over the weekend. The leader of the Organization of Petroleum Exporting Countries also serves as Algeria's oil minister. Political pressure on Iran and the depreciation of the US currency have caused a surge in oil prices, Khelil said. New York-traded crude has more than doubled in a year and touched a record $142.99 at the end of last week on the New York Mercantile Exchange. OPEC oil ministers generally say that oil output is sufficient, even as Saudi Arabia, the biggest producer, pledged to pump an extra 200,000 barrels a day next month to calm the market. The rising cost of crude is not linked to supply, Khelil said. "There is more than enough oil in the market to meet the international demand," added the OPEC president, who will take part in an international energy forum in Madrid on Monday. Prices, which are up 38% this quarter, are heading for the biggest quarterly gain since the first three months of 1999, when oil traded at between $11 and $17. Bloomberg contributed to this report.