Israeli Forecasts for Significant Rise in Gasoline Prices Next Month

SadaNews Economy Translation - Gasoline prices in Israel are expected to rise at the beginning of August, amidst increasing global energy prices and a decline in the value of the shekel in recent weeks.

According to the Hebrew newspaper Ma'ariv, the final increase remains unknown, and the trading activity in the coming days will determine the price to be announced at the end of the month.

The joint fuel management between the Ministries of Finance and Energy sets the price of gasoline at the end of each month, according to the formula stipulated in the Regulation for Monitoring Prices of Goods and Services. This was also translated by SadaNews Economy.

One of the main components of this formula is the average fuel price in the Mediterranean basin during the five trading days near the end of the month, to which a basket of marketing expenses, excise tax, and value-added tax is added.

Changes in fuel prices in the Mediterranean over the coming days will directly affect consumer prices in August.

A drop in energy prices may soften the increase, while any further rise will exacerbate it.

The exchange rate of the dollar also plays a role, as the conversion to shekels is calculated according to the last official exchange rate issued by the Bank of Israel two business days before the end of the month.

The decrease in the value of the shekel leads to an increase in the fuel price in shekels, even if its price in dollars does not change, which means that the current combination of rising energy prices and a declining shekel value doubles the pressure on fuel prices at gas stations.

It is expected that the price of fuel at the beginning of next month will reach about 8 shekels, an increase of between 25 to 30 agorot from the last price.

The Israeli Ministry of Finance does not intend to intervene in the gasoline price by reducing production tax and value-added tax.