Fuel prices rise and the state subsidizes: how much does Smotrich's election economy cost us?

The price of fuel in Israel has soared to a record high of 8.27 shekels per liter. The government announced a temporary half-shekel reduction, without a budgetary source, until after the elections. Dr. Distanik explains: the increase is due to geopolitical tensions and the strengthening of the dollar; the reduction appears to be an election step costing 450 million shekels over two months.

The price of fuel in Israel soared last week to an all-time high of 8.27 shekels per liter. In response, the government announced an additional half-shekel tax reduction, so the state is now absorbing about one shekel per liter. However, the reduction is only in effect until after the elections, and it has no budgetary source. Dr. Davey Distanik, deputy mayor of Tel Aviv, explains that the increase is due to two main factors: geopolitical tensions in the region, which affect global fuel prices, and the strengthening of the dollar in recent weeks. According to him, fuel did not rise immediately after the closure of the Strait of Hormuz because investors expected a quick resolution, but now they understand that the negotiations between the US and Iran are stalling. Distanik calls the reduction "a step mainly related to the elections" and predicts it will be canceled in early November. He notes that excise and VAT amount to 52% of the price, and that the move costs the state about 450 million shekels over two months without a budgetary source.