Water rates to rise in Israel 4.5%

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Despite the sharp fall in oil prices, the cost of living is rising steeply - mobile phone plans, food and household goods prices, electricity rates and municipal taxes are all on the rise.

Water prices in Israel will jump 4.5% on January 1, 2019, sources inform "Globes." The increase is greater than the 3.25% increase mentioned in the Israel Water Authority's previous announcement six weeks ago.

Despite the sharp fall in oil prices in recent weeks, this is the latest in a long list of price rises announced in the past few days, as the cost of living in Israel jumps. These include electricity tariffs, mobile phone plans, municipal taxes, food, household goods and clothing. For example, Osem-Nestle, Tnuva, Tara Dairy, Coca-Cola, Kimberly Clarke, Sano, and Wissotzky have all announced price hikes.

Water bills in Israel have two components. The first is a lower price for a recognized amount measured according to the number of people in the household, which will be raised from NIS 6.61 per cubic meter at present to NIS 6.90 per cubic meter, and a higher price for consumption beyond the recognized quantity, which is being raised from NIS 12.44 per cubic meter to NIS 13 per cubic meter.

It is still unclear why the price increase will be steeper than previously announced. The previous announcement by the Water Authority said that the price increase was needed because of a steep increase in the quantity of water purchased from desalination facilities. The desalination facilities consume large amounts of energy, so it can be assumed that the Water Authority altered the rate of increase in water prices because of higher electricity rates.

The water price increase also includes the projected increase in the Consumer Price Index from July to December 2018. The current price increase follows a continual average real price cut of 30% in water prices over the past five years, due among other things to the water reform, which lowered the excessive number of water corporations.

Published by Globes, Israel business news - en.globes.co.il - on December 12, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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