Israel’s record gas prices expose the limits of election-season relief

In early September, Israel’s 95-octane gasoline price reached a record 8.25 shekels per liter, matching a 2012 high, driven by global market surges and regional conflict. Finance Minister Bezalel Smotrich quickly moved to cut the excise tax by 0.5 shekels per liter, bringing the price down to 7.75 shekels. This action, approved by Attorney General Gali Baharav-Miara, was taken by the caretaker government ahead of the October 27 election, despite warnings about the significant loss in tax revenue.

Israeli media described the move as “election economics,” a familiar label for government relief that lands suspiciously close to a vote.

The high prices are attributed to global factors and Israel’s heavy fuel tax burden, which consistently makes up 55%-60% of the pump price. The current tax cut is temporary, set to expire on October 31, leaving long-term solutions to the next government amid a war-strained budget and volatile fuel market.