Gasoline prices set to drop 20 agorot

Oil prices have fallen to $126 per barrel from the peak of $147 at the beginning of July.

gas good 88 224 (photo credit: Ariel Jerozolimski)
gas good 88 224
(photo credit: Ariel Jerozolimski)
Gasoline prices are expected to drop by at least 20 agorot on August 1 as a result of the plunge in global oil prices, which fell $20 per barrel during the month of July. "We can expect a reduction of 20 agorot maybe more or maybe less - depending on the shekel-dollar exchange rate - as a result of the recent reduction in world oil prices," Amit Mor, CEO of Eco Energy, a Herziliyah-based energy consulting firm told The Jerusalem Post. Mor added that the price could have come down further, between 30 to 40 agurot, had it not been for the rapid appreciation of the dollar against the shekel over recent weeks offsetting the plunge. The shekel-dollar exchange rate stood at NIS 3.49 on Sunday, compared to the 12-year low of NIS 3.23 on July 9. After five straight months of the National Infrastructures Ministry increasing gasoline prices, consumers and businesses alike may be pleased to see them falling from the recent record price of NIS 7 per liter for 95 and 96 octane gasoline to about NIS 6.80. Falling gas prices will relieve taxi drivers and public transportation systems who have all been suffering great losses demanding to increase fees for services to compensate for rising prices. In January, the last time the price was decreased, the price for 95 octane gasoline stood at NIS 6.32 per liter. For August, final gasoline prices will be determined on Tuesday, but experts believe there will be a drop. Midnight on Thursday gasoline prices for August will be updated. The price, set by the government monthly, is calculated by averaging international oil prices and the value of the shekel against the dollar during the last week of each month. Oil prices have this month fallen to $126.51 per barrel at the end of last week from the peak of $147 at the beginning of July. Mor added that if prices stay low and the shekel doesn't appreciate unexpectedly until Tuesday, gas prices will fall. "Decreased world demand contributed to the fall in oil prices, especially in the United States," said Mor. "In June, there was a 2.5 percent drop in oil consumption compared with June 2007. That was due to the rising oil prices and a lagging US economy." Another factor is the US getting involved diplomatically in Iran, he said. "As long as there is no major disruption to oil supply or increased geopolitical tension, I think oil prices could decrease [further]," he said. Last month, Organization of Petroleum Exporting Countries President Chakib Khelil said he expected the price of oil to rise to $170 per barrel by the end of the year. At the beginning of July as gasoline prices rose by an average of 4%, the Knesset Finance Committee urged the Finance Ministry to reinstate diesel fuel controls in response to skyrocketing oil prices. The recent steep rise in diesel fuel prices has raised a public storm, with consumers, taxi drivers and moving companies contending that prices have risen completely out of proportion to the rise in world oil prices. The protest against record fuel prices came to a head last month as hundreds of truck drivers, taxi drivers and bus drivers gathered to demonstrate their dissatisfaction of the government's apparent indifference to the problem.