Price of gasoline expected to reach record NIS 7.60 in May

Though public outcry is set to grow, costs are higher in parts of Europe

Gas prices (photo credit: Marc Israel Sellem/The Jerusalem Post)
Gas prices
(photo credit: Marc Israel Sellem/The Jerusalem Post)
The maximum price of a liter of 95 octane gasoline is expected to rise to a record NIS 7.60 at full-service pumps in May, Channel 10 reported on Thursday.
According to the report, the increase will occur partly due to an update in the fuel excise tax, while also taking into account the continuing increase in the cost of oil in world markets. However, the price rise should be mitigated slightly by the continuing fall of the dollar, which is currently at a 30-month low against the shekel.
The government, which supervises prices for fuel sold to the public at gas stations, raised the maximum price to NIS 7.52 at full-service pumps in April, after raising it the previous month by 4% to NIS 7.43. Public anger over rising gas prices has already forced the government to back down at least once this year, when Finance Minister Yuval Steinitz signed a directive cutting the excise tax on gasoline by NIS 0.20 per liter in mid-February.

The previous months’ price increases could have been made even worse had National Infrastructures Minister Uzi Landau not decided to suspend updating the marketing margins of Israeli fuel companies by NIS 0.02 per liter. The National Infrastructures Ministry’s fuel supervisor Chen Bar-Yosef is close to completing a study he began one year ago on the marketing spread, which is currently set at 10% of the government- mandated price of gasoline.
The price of fuel at gas stations is determined by five components: the cost of oil, the Finance Ministry’s fuel excise, the marketing margins, 16% value added tax on the three aforementioned components, and an added flat fee for full service that currently stands at NIS 0.13.
Consumer concern over the rising prices has led to the proliferation of guides such as the website, which was established by two university students and allows users to search for which gas stations offer the lowest prices. According to the website, the lowest price found this week was at the Tamar gas station in Afula, where petrol cost NIS 6.99 per liter on Wednesday.
But although the public backlash in Israel is certain to grow, the situation is not as severe as it is in some European countries, with the average price of 95 octane hitting as high as 1.749 euros (NIS 8.72) per liter in the Netherlands this week.
According to fortnightly data compiled by Touring Club Switzerland, an organization supplying support for stranded vehicles, the price of gas at the pump in the biggest euro zone countries hovered between 1.360 euros (NIS 6.78) in Spain and 1.648 euros (NIS 8.21) in France. Across the Atlantic, where prices tend to be much lower, gasoline was being sold at $3.844 per gallon, translating roughly to NIS 3.46 per liter. The maximum price set by the government for May will be announced next Thursday.