Price Hikes: Cement Prices Rising 8%, Electricity by 10%

Argument may rage over whether or not Israel is experiencing inflation, but the fact is that the price of dairy will rise as of tomorrow, and the prices of electricity and cement will jump in January.

The price of cement will rise by 8 percent from January, after the Industry and Trade Ministry yesterday approved the request of Israel's cement production monopoly, Nesher, to the umbrage of builders. Although the hike enjoys the government's stamp of approval, the builders hope to sweeten the bitter pill. Nesher argues that its cost of production has increased sharply.

The hike will raise the price of new apartments by thousands of shekels, since cement and its products - certain blocks, plaster and facades - comprise about 7 percent of the cost of building a flat.

Nissim Boblil, the president of the Israel Association of Contractors and Builders, angrily claimed that Nesher was abusing its monopolistic status to raise the price of cement at the expense of homebuyers. He may however be thinking about contractors, who will probably have to soak up at least some of the increase themselves.

The association claims that Nesher has raised the price of cement by 25 percent in the last three years, and says that it means to fight the latest decree. In the past, the association had some success at moderating price hikes that Nesher instituted. "This time, the association again means to significantly reduce the price hike and also, to spread it over more time," Boblil said.

Nesher is controlled by Nochi Dankner's IDB group. It is run by Joel Feldschuh, formerly of El Al. As a monopoly its prices are regulated by the Ministry of Industry and Trade and Finance Ministry.

As for electricity, its price will leap by 4.5 percent next week. It's the Israel Electric Corporation's third price hike inside four months. The government-controlled utility blames the soaring cost of oil. From the year's start, the price of electricity will have risen by 10.2 percent, after the coming increase.

Power for households rises by 4.25 percent on November 11 to 45.91 agorot per kilowatt/hour, compared with 44.04 agorot today. What that means in practice, is that heating our homes will cost tens of shekels more each month.