Israelis to pay less at the pump.
FUELING HOLIDAY CHEER: Israelis to pay less at the pump. Photo by Bloomberg
Text size

The price of gasoline is set to drop by 31 agorot a liter on Monday night at midnight.

Regular 95-octane fuel will sell at a maximum price of NIS 7.94 per liter. Customers who choose to have their gas pumped for them should note that, due to an adjustment based on the inflation index, the added cost for full-service gasoline will go up to 18 agorot per liter.

Maximum retail gasoline prices in Israel are set by the government and are generally adjusted at the beginning of every month. This year, October 1 falls on a holiday, so the price is being adjusted on October 2.

Each month's price ceiling is calculated based on the wholesale price in Europe prevailing on the first five of the last seven business days of the previous month, meaning that October's price is calculated based on the price of gasoline in Europe near the end of September.

The nearly 4% drop in the price of gasoline for October is the result of an approximately 5.5% reduction in the price of fuel in Europe and a 2.5% reduction in the value of the U.S. dollar against the shekel during the past month.

This marks the first decline in the retail gasoline price here in two months.

During those two months, fuel prices rose 13.5%, reaching an all-time high in September of NIS 8.25 per liter for self-serve regular. The cost hike was primarily the result of a jump in gasoline prices in Europe and the weakening of the shekel against the dollar at the time. But in the past two weeks, the pricing factors did a U-turn, driving October's maximum gasoline prices in Israel downward.

The September retail gasoline price in Israel was also affected by the increase in the value added tax from 16% to 17%, adding about 8 agorot per liter. An increase in excise taxes, which are automatically adjusted based on the consumer price index, also boosted the price of gasoline in September by 2 agorot a liter. Taxes make up about 52% of the retail price of gasoline.