Gasoline prices to hit record NIS 8.25 per liter

Soaring global oil prices and the continued depreciation of the shekel against the dollar both contributed to the increase.

August 30, 2012 13:35
1 minute read.
Person filling car gas tank [illustrative]

Person filling car gas tank 370 . (photo credit: Thinkstock/Imagebank)


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The maximum price of self-service 95- octane gasoline will rise 55 agorot to a record-high NIS 8.25 per liter in September, the Energy and Water Ministry announced on Thursday.

Motorists will absorb the blow in two stages: At midnight on Friday, the price will change from the current NIS 7.70 to NIS 7.77 as value-added tax increases from 16 percent to 17%; the following night it will reach NIS 8.25, in accordance with the ministry’s instructions.

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A 14% rise in the cost of oil and the continued depreciation of the shekel against the dollar both contributed to the increase. The previous record price motorists paid for a liter of self-service gasoline was NIS 7.79 – or NIS 8 with full-service fee – in April this year.

The price of gasoline is set by the Energy and Water Ministry each month according to the following components: the cost of oil (NIS 3.42 per liter in September), excise tax (NIS 2.99), marketing margins (NIS 0.64), as well as 17% VAT on the three aforementioned components.

In addition, there is a full-service fee of NIS 0.17, which brings the total price per liter to NIS 8.42.

Opposition leader Shaul Mofaz (Kadima) issued a statement in which he labeled the price increase “the prime minister’s gift to Israeli citizens for Rosh Hashana.”

He predicted the increase would lead to a wave of uncontrollable inflation, causing thousands of people to lose their jobs.

According to a Bloomberg survey of 60 countries published this month, Israel has the third-highest gasoline price in the world, after Norway and Turkey.

“Surrounded by oil producers in the Middle East, Israel itself drills very little.

Gasoline prices are controlled by the government, and taxes typically make up about half the cost of a gallon,” the survey said.

“Gas prices have led to widespread discontent and political demonstrations over the cost of living. Prime Minister Binyamin Netanyahu has intervened to prevent prices from rising with the global price of oil, most recently when he lowered prices 2.9% on June 1, according to the Energy and Water Ministry.”

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