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Power Price Rise on the Horizon for Israelis in 2012

Israelis will be expected to pay even more than they already have for their electricity by the end of this secular calendar year.
By Chana Ya'ar
First Publish: 1/29/2012, 12:46 PM

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Israelis will be expected to pay even more than they already have for their electricity by the end of this secular calendar year.

According to a statement issued Sunday by the Utilities Regulatory Commission, electricity rates are going to rise by 6.6 percent over the course of the year in 2012.

And it won't stop there. By the end of 2014, the price of power is expected to be 31 percent higher than it is at present.

The price hikes are expected to arrive in gradually compounded steps over the next two years. Next year there will be a 2.6 percent increase in the price of electricity, and a further 3.7 percent price rise in 2014. 

The predicted price hikes are based on the current price of crude oil and natural gas, the commission said. In addition, it warned that other increases could be on the way if a steady supply of the precious resources is not maintained.

Some of the above is due to the instability of the natural gas supply from the Egyptian Sinai pipeline over the past year. The pipeline, which provides Israel with some 40 percent of the state's natural gas, was attacked at least 10 times since former Egyptian President Hosni Mubarak was deposed in February 2011.

Each time, the supply of natural gas to Israel and Jordan was interrupted, forcing Israel to use diesel to generate electricity, an expensive alternative.

Over the past year, both Israel and Jordan have begun to explore alternative options to secure a more stable supply of the natural resource.

In Israel, the discovery of the mammoth Tamar natural gas field in the Mediterranean waters off the coast of Haifa has given the Jewish State hope it may no longer need rely on foreign sources for its energy needs -- but the field will not be functional for at least another year or two, at best.