Gasoline prices will rise at midnight tonight by 4 percent, setting their latest record high. Prices are climbing in sympathy with prices around the world amid the upheaval in Libya and the rest of the Middle East.

Recent falls of the shekel against the dollar are also playing a part. At midnight, the price of a liter of 95-octane will rise 28 agorot to NIS 7.30 per liter - for self service, including VAT.

The shekel has fallen by about 1 percent against the dollar over the past month. Fuel taxes were lowered two weeks ago by 24 agorot per liter, including VAT, but this month's price increase will more than wipe out these savings.

The maximum price for gasoline in Israel is set once a month; it changes on the first of the month at midnight. Over the past month, world oil prices rose 10.9 percent.

Also, 53.4 percent of the cost of a liter of gas is tax - excise, fuel and VAT. The rest goes to the gas stations and gas companies. If world oil prices, which are now above $100 per barrel, reach between $115 and $120, the price of gas in Israel could reach NIS 8 per liter, said Prico Management CEO Vered Yitzhaki.

Israeli gasoline prices are set based on a complex formula that takes into account the market price for gas in the Eastern Mediterranean over the last week of the previous month. The calculation is based on the price of gasoline in the French port of Lavera over five business days near the end of the month.

Then the cost of insurance, storage and a number of other factors at Israeli refineries are added in, and the final price is set for sale to the gas companies by Israeli refineries.

Tomorrow this will be NIS 2.64 per liter of 95-octane. This is the maximum price; the refineries may charge less. Then fuel taxes are added, which were NIS 2.89 per liter until the 24-agorot reduction two weeks ago.

These taxes are linked to the consumer price index. Add to this the cut for the gas stations and fuel companies - another 71 agorot per liter - and then VAT is added to the entire amount, another 16 percent.

The National Infrastructure Ministry said it is considering freezing the April update of the gas wholesalers' commissions. This sum is supposed to cover the gas companies' marketing and sales costs, and is updated every six months, based on similar costs in Europe. The ministry is reexamining the amount paid to the fuel companies.

Over the past three months, protesters have campaigned against the rise in gasoline prices. Hundreds attended a demonstration in Tel Aviv two weeks ago. Another protest is planned for tomorrow in Haifa, where Finance Minister Yuval Steinitz will address a convention of the Chamber of Commerce and Industry. One of the leaders of the protest movement, Ze'ev Grauer, said his group particularly wanted the tax on fuel to be reduced.

The Histadrut labor federation was successful this month in its efforts to repeal the increase in the fuel tax that went into effect on January 1. It has refrained, however, from responding to the price rise that will take effect tonight.

Sources close to Histadrut chairman Ofer Eini have said that there have been contacts between the labor federation and the Finance Ministry. Union of Local Authorities chief Shlomo Buhbut and Shraga Brosh, in his capacity as a top official at the Federation of Israeli Economic Organizations, have taken part in an attempt to agree on price increases for other commodities.