Government trims price at pump days after it reached record high

The gasoline price will drop by half a shekel at midnight Sunday, after the Finance Ministry applies a cut in a fuel tax to bring down the cost for drivers, days after prices reached a record high.

Fuel will drop to NIS 7.77 per liter, after soaring to NIS 8.27 per liter last week.

The price for standard 95 octane gasoline, equivalent to $9.65 per gallon, will remain in place for a month.

In a post to his official X account, Finance Minister Bezalel Smotrich announced that he had signed an order to reduce the excise tax on fuel to bring down the price for consumers.

“As the prices of fuel soar around the world, we are ensuring that the prices in Israel remain reasonable,” he wrote.

“Together with the prime minister, we are continuing to run Israel with responsibility and security.”

Prime Minister Benjamin Netanyahu made a similar announcement on his X account, adding that Israel’s economy “is breaking records.”

“We will continue to steer it responsibly,” he wrote.

Last Thursday, in response to the fuel price jump, Smotrich sought permission for a NIS 0.50 reduction in the fuel excise tax to bring the price down. After the ministry’s legal adviser and Attorney General Gali Baharav-Miara ruled the move valid, the Finance Ministry announced it would be applied on Sunday night.

However, the Kan public broadcaster and Ynet outlet both reported that Finance Ministry officials warned against applying the tax cut, as it will cost the state NIS 150 million ($49.14 million) in revenue for the month.

Smotrich already slashed NIS 0.50 from the tax in September to counter rising fuel prices at the time. That initial cut will also remain in place until the end of October and was expected to cost the state NIS 310 million ($101.5 million), according to Hebrew media reports.

Smotrich required special permission from Baharav-Miara to apply the excise discount amid concerns it could be illegal so close to the election scheduled for October 27.

Without the tax cut, the price in September would have been NIS 8.25 per liter, matching a record previously set in September 2012, when, similarly, tensions between Iran and an Israeli government led by Netanyahu drove a jump in oil prices.

The Energy Ministry said in a statement last week that the price rise is largely due to instability in world energy markets sending prices skyward, with oil breaking the $100 per barrel benchmark. It did not mention the war with Iran, which was started by Israel and the US in late February.

Fuel prices in Israel are controlled by the government, which updates the maximum gas stations may charge once a month.