If there are no last-minute surprises, the price of fuel is expected to register a second monthly drop in a row on the night between Wednesday and Thursday (9/31). The price of a liter of gasoline in September will drop, according to estimates in the field, in the range between 20-40 shekels – and will be sold at the gas stations around NIS 6.18-6.38.
Global oil trade has been characterized by volatility in the last month, but after the ups and downs, a barrel of Brent oil is priced today (Monday) at about $101 – similar to the price it was at the end of July. The Ministry of Energy calculates the fuel rates according to oil prices in the last trading week of each month. On average, the last week oil was slightly cheaper than the last week of July, so gasoline will be cheaper even though the price of oil is currently the same as it was a month ago. Another factor in lowering prices is the dollar exchange rate, which has weakened against the shekel by about 3.9% in the last month.
Finally, the most significant missing in the price of fuel is the excise tax. First, Finance Minister Avigdor Lieberman managed to get approval from the Legal Advisor to the Government to reduce the tax by NIS per liter for the month of August only. Now, with the expiration date of the temporary excise order approaching, Lieberman’s entourage is working with the legal authorities to extend the discount to the public until November 15, two weeks after the elections, in accordance with the original goal of the Minister of Finance.
Lieberman’s tax reduction costs the treasury about NIS 350 million a month in lost revenue. In a scenario in which the ombudsman determines that this is an improper election economy and does not approve of extending the discount on the excise tax, the price of fuel may jump sharply and become more expensive next month by 60-80 cents per liter. However, according to estimates, the chances of this happening are low.
Apparently, the Ministry of Energy will publish the fuel price for September tomorrow (Tuesday) and immediately after that the Ministry of Finance will publish for public comment the order that the tax benefit will be maintained for the coming period. By September 1st, the new order should already come into effect in a way that will allow the price drop at the gas stations.