A slight recovery in oil prices and a weaker shekel mean Israeli gasoline prices will barely fall in February.
The maximum price of 95 octane gasoline at self-service pumps in Israel is expected to fall by just NIS 0.04 per liter, from NIS 5.78 to NIS 5.74 on February 1, energy sector sources now estimate. Only last week those sources had estimated a more substantial NIS 0.15 fall. However, a slight recovery in the price of oil over the past week, and the strengthening of the dollar against the shekel, has wiped out much of the anticipated price fall. Gasoline prices have been falling consistently in Israel for the past two years as oil prices plunge worldwide. The maximum price of 95 octane gasoline at self-service pumps in Israel fell by NIS 0.21 per liter at the beginning of this month.
However, heavy taxation on fuel in Israel means that as the price of oil falls more and more, the influence on the price of gasoline becomes less and less, because excise taxation is a fixed amount - NIS 3 per liter - and not dependent on the changing price of oil. If that is not enough of a take for the government, the final price of gasoline also includes 17% VAT. With marketing costs the price of a liter of 95 octane is fixed at NIS 4.50 before taking into account the price of oil.
The price of fuel in Israel is set according to the price in the last four days of the month at Lavera in France.
Published by Globes [online], Israel business news - www.globes-online.com - on January 27, 2016
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