Significant Drop in Fuel Prices Before the Holidays: Expected to Fall Below Eight Shekels per Liter
After a sharp jump in fuel prices this month, the cost is expected to drop in September by approximately 25 agorot to 7.84 shekels per liter. The final price will be determined on Sunday morning based on oil prices and the dollar exchange rate.
Good economic news for consumers ahead of the Tishrei holidays. On Monday at midnight, fuel prices in Israel are expected to drop significantly due to the easing of tensions on the Iran-USA front. Current estimates suggest the price will fall by about 25 agorot, returning to a level below eight shekels.
At the beginning of August, when tensions in the Strait of Hormuz peaked, fuel prices rose by 8.2%—an increase of 61 agorot—reaching a record high since September 2012 of 8.09 shekels per liter of 95 octane at self-service pumps. With full service, the price reached 8.34 shekels, while in Eilat, the self-service price was set at 6.85 shekels. It is now expected that the price per liter for self-service will drop to approximately 7.84 shekels, though the final price will be confirmed on Sunday morning.
Fuel prices in Israel are determined based on the average price of a barrel of oil in the Mediterranean basin during the last five days of the month (up to two days before its end) and the dollar exchange rate at the time of publication. A reduction of 25 agorot per liter translates to savings of 12.5 shekels for a 50-liter tank, or about 50 shekels per month for those who fill up four times.
The price of a barrel of Brent crude oil stands at approximately 87 dollars this morning, about 10% lower than at the end of July. The dollar exchange rate is fluctuating around 3.97 shekels, down about 3% from the end of July. The significant rise in fuel prices in August is expected to push the Consumer Price Index to around one percent, which may prevent the Bank of Israel from announcing a third consecutive interest rate cut this coming Tuesday.
