On Sunday, gas prices will drop by almost NIS 1.50 per liter in Israel at midnight, after having increased steadily in the last few months.
From Monday onwards, Israelis would be required to pay about NIS 6.54 for every liter of gasoline, rather than NIS 8.8 that they had been paying during the month of July.
Such high prices had not been seen in Israel since 2012. The reason behind the drop in price of gasoline is because the excise tax on gasoline has been reduced by the government.
Avigdor Liberman, the Finance Minister, had first announced the reduction in tax back in April. The price drop was also because of a decline seen in crude oil prices.
They have been declining steadily all over the world since the beginning of June. On June 8th, oil prices had reached their highest level since March 8th at $122.11 per barrel.
Since then, the prices have dropped to as low as $98, which was seen on Sunday.
The drop in the price of oil is partly because of the worries about a global recession, which would mean that the demand for oil would fall in the future.
Some of the other reasons that have also contributed to the drop include an increase in oil production in countries like Libya and the US.
Furthermore, the United States has also chosen to release its oil reserves. But, even with oil prices coming down, taxes are primarily responsible for half of the price charged in Israel for a liter of gasoline.
In April, Liberman had opted to introduce a half a shekel reduction in the tariff and the latest reduction is going to be the same.
This would mean that the tax relief for every liter would be around NIS 1. However, it should be noted that this tax discount is only applicable for a month.
This means that prices would go up once more by the end of August by half a shekel. As for the initial reduction of half a shekel in April, it would be applicable till the end of January 2023.
A big relief
The drop in prices of gasoline would be a big relief to a number of Israelis who have been trying to cope up with the increase in costs of living.
Before announcing the tax relief, Liberman tweeted that some people come to the gas station for work, while others visit before elections with suits and a film crew.
He was making a reference to the video that had been uploaded earlier this month by the head of the opposition, Benjamin Netanyahu.
He had visited a gas station and had talked about the high gas prices. Elections in Israel are scheduled to take place on November 1st.
As compared to other countries in the developed world, Israel has only seen modest inflation, but costs of living have recorded a sharp rise, including building materials and food.
Real estate prices in Israel have also skyrocketed.