Gas Price Hikes Fueling Car Sales, but No Protests, as Drivers Give Up Guzzlers

For some, the rising gas prices are an opportunity; Toyota CEO Ran Danai says sales of hybrid vehicles - combining a conventional internal combustion engine with an electric propulsion system - have soared by 40 percent in recent weeks.

Fuel-guzzling SUV owners are not the only ones feeling the pinch at the pump. The gas price hikes are forcing even motorcyclists and motorscooter owners to reconsider their traveling habits. But are Israelis angry enough to take to the streets in protest?

Gas station
Hagai Frid

Moshe Rothman of Yokneam is putting his Ford Econoline up for sale, even though it has only run up 82,000 kilometers. Rothman bought the van in 2002 for his disabled son. At the time the family's monthly disability allowance gave them NIS 533 for gas, with which they could fill the car with 141 liters. Today the figure is NIS 615 but can only buy 85 liters. Keeping the van has become too expensive.

"I'm really sorry to give it up, but I have no choice," he said.

Rothman believes the 13 percent gas price hike over the past year, including the new gas tax that came into effect some two weeks ago, will send Israelis into the streets.

"The situation in Egypt and the fiasco in the IDF brass have pushed the issue from the headlines, but now people are beginning to wake up again," he said.

Rothman plans on taking part in demonstrations against the new tax, if any are organized - and only if someone gives him a ride to the protest.

"The government in Jerusalem is robbing the people. On the one hand the gas prices are insane, on the other hand public transportation is a disgrace. What do they expect people to do?" he said.

Victor of Tel Aviv has put his Toyota Land Cruiser up for sale on the Internet. He is the car's original owner and says it is "as good as new."

"I am very pleased with the vehicle but I want to switch to a car with a more economic engine," he said.

"I'm paying NIS 4,000 a month on gas. It's hard to afford it and now the government has made it even more difficult with the new tax," he said.

Victor says the first thing potential buyers ask him is "how much gas does it consume."

Motorbikers and scooter owners are also groaning under the new tax. Yossi Vahaba of Ramat Gan is selling his Super Duke 125cc motor scooter, which has served him faithfully in recent years, enabling him to bypass the morning rush hour traffic jams on his way to work.

Vahaba, who owns a hair salon in north Tel Aviv, says the biggest problem for scooter owners is the exorbitant compulsory-insurance prices. Together with the sharp gas price hike, keeping a scooter is just not worth it, he says.

The car-leasing market is also adapting to the price hikes.

"Until recently the main thing that interested car purchasers in large companies was how much they would have to pay for each vehicle," a worker in a major leasing company in the central region says.

"In the past two weeks their first question is what the vehicles' fuel consumption is. They realize that a cheap deal on a certain model could cost them dearly in refueling."

For some, the rising gas prices are an opportunity. Toyota CEO Ran Danai says sales of hybrid vehicles - combining a conventional internal combustion engine with an electric propulsion system - have soared by 40 percent in recent weeks.

Even if the government responds to public pressure and cancels the latest gas tax, prices will continue to climb and as a result, more and more people will turn to the hybrid option, Danai thinks.

"The tax raises the price of 95 octane gas by 20 agorot per liter. Even if the government revokes it, a liter will still cost NIS 7," he said.

"An oil barrel costs $90 dollars today but it's only a matter of time until prices will return to their 2008 level of $100 or more per barrel. This is a universal trend and the way to deal with it is to move to smart, economic hybrid engines," he said.