Daily Israel Report

Inflation Rearing its Head?

Transportation prices going up: Gas to hit record high on Jan. 1, giving Israel the 5th highest in the world, and bus prices will rise by 3%.
By Hillel Fendel
First Publish: 12/30/2010, 6:03 PM / Last Update: 12/30/2010, 9:29 PM

Flash 90

Transportation prices are going up: Gasoline will hit a record high on Jan. 1, and bus prices are to rise by 3%.

Government-regulated gas (95 octane) prices will hit a record high this Sunday, when they jump a formidable 43 agorot per liter (46 cents a gallon) to 7.14 shekels ($7.60 a gallon). Only in Turkey, Norway, Eritrea and the Netherlands is the price higher.

The stiff hike is due to the declining dollar, the rising prices of benzene around the world, and a rise in gas taxes approved this week by the Knesset Finance Committee. Knesset Audit Committee Chairman MK Yoel Hasson (Kadima) said the hike would be a “death blow” to the middle class, and that 56 agorot of every shekel we pay for gas goes back to the government in the form of taxes, including VAT.

At the same time, public transportation rates will also increase, as they do twice a year based on the Consumer Price Index. City buses in Jerusalem and Haifa will cost 6.4 shekels instead of 6.2, and will hit 6 shekels in Tel Aviv and 4.1 in Be’er Sheva. Jerusalem monthly bus tickets will climb 8 shekels to 252 shekels, and 7 shekels in Tel Aviv to 215.

Israel Railways prices will be updated on Feb. 1.

Water Hike - Postponed
Water prices in Israel were supposed to jump by 2.7% next week, but this was canceled just a few days ago by the Knesset Finance Committee. Despite this, the Union of Local Authorities in Israel (ULAI) has called a nationwide strike of municipalities, beginning next week, to protest, among other things, the "rising water prices." Asked to explain the anomaly, a ULAI spokesperson told Israel National News that the latest price hike has not been canceled, but rather “postponed,” and “we want the prices to go down, not up.”

The price of water has risen dramatically over the past three years. A typical family of five in the northern town of Hatzor HaGelilit, for instance, paid 276 shekels a year for their water in 2007, and must now pay more than 627. Value Added Tax, 16%, has been added to water prices over the course of the past year.