Why Gasoline Often Gets More Expensive in Israel – Analysis
The rise in gasoline prices in Israel in August 2026 is linked to higher global fuel costs and a strengthening dollar. Experts explain the pricing mechanism, the tax share, and the authorities' refusal to reduce the excise tax. The price of 8.09 shekels per liter is close to the historical peak of 8.25 shekels in 2012.
The expected increase in gasoline prices in Israel in August 2026 is driven by two main factors: a roughly 22% rise in global fuel prices due to tensions around the Strait of Hormuz, and a strengthening of the dollar by about 1.9%. The Petroleum Administration at the Ministry of Energy calculates the monthly gasoline price using a formula approved in 2002: the average price on the Mediterranean market over five trading days plus distribution costs, excise tax (3.61 shekels per liter), and VAT (18%). Taxes constitute a significant portion of the price. The record price of 8.25 shekels per liter was recorded in September 2012; then-Prime Minister Benjamin Netanyahu first proposed reducing the fuel tax. This measure was later canceled, but in the summer of 2022, Finance Minister Avigdor Liberman reintroduced the relief when the price exceeded 8 shekels. However, in early 2024, current Finance Minister Bezalel Smotrich canceled the relief due to budgetary pressures related to the war's aftermath. The current price of 8.09 shekels per liter is close to the historical peak; a comparable level of 8.07 shekels was seen in May 2026 amid the conflict with Iran. The article cites Ynet data and contains no evaluative judgments in the authorial voice.