This morning light rail fares in Jerusalem and Tel Aviv jumped by 3.3% from NIS 6 to NIS 8. This move was made to finance the moderation in the hike in public transport fares that had been supposed to go into effect two years ago.
The fares had been initially scheduled to increase in July 2024. This is after public transport fares were supposed to increase by 12% in July 2023 due to the increase in inputs, and the Ministries Finance and Transport were looking for a source of funding to moderate the increase. According to the compromise reached, one of the sources of funding for this subsidy was to increase light rail fares by NIS 2. Initially, the Ministry of Transport denied there was any such agreement, but the Prices Committee - which also includes representatives from the Ministry of Transportation - approved the increase.
However, since July, the instructions given to the light rail operators have been confusing, and they were not prepared to increase the fares until the issue was resolved. The delay resulted NIS 60 million less flowing into the state coffers.
At the same time, as part of the latest budget agreement between the Ministries of Finance and Transport, bus fares will also increase by 33.3% from NIS 6 shekels to NIS 8, and accordingly, monthly subscriptions for travel on all means of public transport, in accordance with the state budget for 2025, which has not yet been passed. Along with the increase in fares for the public, discounts will also apply to designated populations, such as residents in areas that, according to the Central Bureau of Statistics, have been defined as socioeconomic status 1-5 (out of 10), and free travel will be provided to citizens over 65 (as opposed to the current age of 75).
A passenger pays 15% of the cost of the trip
Public transport in Israel is subsidized annually by about NIS 14 billion, and a passenger who purchases a ticket pays about 15% of the cost of the trip, while the state, pays about 85%, a figure that is high relative to the Western world.
The subsidy budget has jumped fourfold in the last decade, among other things as a result of the money received from passengers being eroded over the years. The subsidy has increased while the total revenue from fares has decreased. Thus, passengers today pay NIS 2.7 per trip compared to NIS 8 in 2004, according to 2023 prices.
Published by Globes, Israel business news - en.globes.co.il - on February 25, 2025.
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