Why Don't Prices Drop Amidst the Decline of the Dollar and Fuel?

The Palestinian markets are facing a clear economic paradox; over the course of a year, the US dollar has sharply declined against the Israeli shekel by 23%, which is nearly a quarter of its value. Given the economic data and reports from the Palestinian Central Bureau of Statistics, which indicate a persistent trade deficit and a significant reliance on foreign imports compared to exports, economic principles dictate an automatic decrease in the prices of imported goods due to the sharp decline in the exchange rate of the dollar against the shekel, even when considering factors such as existing stock, pre-arranged deals, and rising insurance and shipping costs, among other influencing factors.

In parallel with this decline, fuel prices in Palestine have noticeably dropped at the beginning of June 2026 compared to early April; the price of diesel fell by 11.5%, and the price of a domestic gas cylinder (12 kg) decreased by 15.8%. These are vital derivatives that represent the backbone of various production and economic sectors, including public transportation in Palestine.

In light of these developments, official bodies, primarily the Ministry of National Economy and the Ministry of Transport and Communications, along with the Consumer Protection Association and various unions, are called upon to take immediate actions to reassess prices and tariffs approved last April. There is an urgent need to regulate prices and reduce public transportation tariffs, which primarily depend on diesel, after previous increases have burdened the most vulnerable and marginalized social groups in Palestinian society, notably school and university students, employees forced to commute daily, and poor community members who do not own private cars and have to rely on public transportation, whether between Palestinian cities and towns, or within them.

The policy of a swift response to raise prices whenever there is an increase in the cost of production inputs or fuel, contrasted with a slowdown in price reductions when costs decline, exacerbates the suffering of Palestinian citizens. The urgency for government intervention to protect consumers increases at a time when the financial and economic crisis is worsening due to the Israeli economic strangulation policy against the Palestinian people, which includes the complete withholding of clearance funds for over a year and the deprivation of Palestinian workers of their sources of livelihood inside the Green Line, in addition to the tight Israeli siege through nearly 1,000 checkpoints and gates that cut across the West Bank, and continuous settler attacks on the agricultural sector and livestock, as well as on citizens' properties on the outskirts of Palestinian cities and villages, in a dangerously escalating trend.

There must also be a role for the private sector in Palestine to assume its social responsibilities and alleviate the burden on citizens, as well as a role for civil society organizations in generating momentum to promote social justice and the rights of marginalized and poor groups who lack a voice.