Israel raised the price of gasoline for the third month in a row to 7.51 shekels ($2.10) per liter for 95 octane gasoline, an increase of 0.13 shekels ($0.036) per liter for self-service, while keeping the service fees for gas station workers at 0.22 shekels ($0.062), the Ministry of Energy and Infrastructure announced. Israeli infrastructure.
New price
Thus, the new price of gasoline is the highest since July 2022, which recorded 8.08 shekels ($2.26) due to the Russian war on Ukraine, according to the Israeli economic newspaper Globes, which indicated that at the beginning of the year 2024, the price of a liter of gasoline increased by 0.57 shekels ($0.16).
The rise was driven by the rise in global oil prices, the fluctuation of the shekel exchange rate against the dollar, and the decision of Israeli Finance Minister Bezalel Smotrich to restore the previous full level of the production tax on fuel.
Between April 2022 and the end of 2023, the Ministry of Finance reduced taxes to maintain the stability of the price of 95 octane gasoline, keeping it slightly below 7 shekels ($1.96) per liter.
As part of the cuts in the revised state budget for 2024, it was decided to cancel the tax cut, which last year cost state coffers more than one billion shekels ($280 million) in revenue.
War expenses
This comes amid an increase in army expenditures as a result of the war on the Gaza Strip, which prompted the Ministry of Finance to prepare an amended budget for the current year. The Finance Committee in the Knesset (Israel’s parliament) approved a proposal to raise the budget deficit from 2.25% to 6.6% of the gross domestic product.
The committee’s approval paves the way for a full Knesset vote in the coming weeks.
The committee said, in a statement: “The difference in the targeted deficit amounts to about 70 billion shekels ($19.6 billion) and aims to finance the additional expenditures required as a result of the war.”
Earlier this month, the Israeli Knesset initially approved a revised budget for 2024 worth NIS 584 billion ($163 billion), or NIS 724 billion ($202.4 billion), including debt repayment.
Last year, Israel approved a budget for the years 2023 and 2024, but the Gaza war caused a shock to the government’s public finances, which required changes in the budget and additional spending.
