Israel announced on Tuesday that it would raise the maximum price of a litre of 95-octane petrol to a record 8.27 shekels ($2.69) at self-service stations, an increase of 52 agorot ($0.17), with the new price taking effect in the early hours of Thursday, October 1, 2026.
Price exceeds previous peak
The new price exceeds the previous record of 8.25 shekels ($2.69) per litre, set in September 2012 and briefly reached at the start of the current month. The government subsequently cut the fuel tax temporarily, bringing prices at the pumps down to 7.75 shekels ($2.52) for most of September.
The increase comes despite the tax reduction remaining in place until the end of October, after rising global prices eroded its effect on consumers in less than a month.
Global prices and the dollar drive up costs
The Energy Ministry said petrol prices on international markets had risen by about 13% alongside higher oil prices and concerns over the stability of energy supplies. A roughly 3% rise in the dollar against the shekel also contributed to the increase in the domestic price.
The rise in global energy prices coincided with the continuing Iran war and oil prices exceeding $100 per barrel. The Energy Ministry statement referred to disruption in global energy markets without explicitly linking the increase to the war.
Cost-of-living pressures ahead of Knesset elections
Dr Ahmed al-Bahansi, an expert on Israeli affairs, said the impact of higher petrol prices extended beyond the cost of filling cars, given that fuel feeds into transport, food, services and supply-chain costs. He added that a continued increase could turn the issue into a broader cost-of-living concern ahead of the Knesset elections scheduled for October 27.
Al-Bahansi added that the rising cost of living would give the opposition an opportunity to question Benjamin Netanyahu's government over the economic cost of the war, while Netanyahu could present the fuel-tax cut as an attempt to protect consumers. He said higher prices represented a negative electoral factor for the prime minister, but their impact overlapped with security and political issues and would not by itself determine the voting outcome.
