Prices of basic consumer goods continue to rise as Tnuva, the largest food manufacturer in Israel, announced an increase in the price of some of its basic products. The price of fuel is also expected to rise significantly next week as the 0.5% fuel tax reduction period ends. Electricity is also expected to become more expensive at the beginning of next year due to a jump in coal prices.
All these price increases are expected to reduce consumption in Israel, especially among marginalized groups such as the Arab community, which sits at the bottom of socio-economic rankings. The harm to consumer power is especially worrying given that average salaries have not increased in a long time.
The price of fuel is highly dependent on the tax rate on various fuels. The outgoing government reduced the excise tax on fuel by 1.5 percentage points and reduced the cost of fuel by about NIS 1 per liter. But this reduction is expected to end on the first of December and the price per liter of fuel is expected to jump to more than NIS 7.
The price of fuel rose on the night of the election on November 1 to approximately NIS 6.46 per liter (self-service) in light of the increase in global oil prices.
Following a 141% jump in coal prices, an increase in electricity prices is also expected. The Public Utility Authority for Electricity is expected to convene this week to discuss the increase in the price of electricity for consumers starting January 1, 2023.
According to estimates, the Electric Corporation will continue to use coal for electricity production until 2025, despite the dramatic rise in the price of coal. Therefore, electricity is expected to become more expensive for the second time this year, after it increased in September by 8.6%.
In addition to electricity, it is expected that the price of water will also increase by about 5% at the beginning of 2023. On July 1 of this year, water prices rose by 1.23%. Although the increased use of desalination plants in recent years has prevented an increase in water prices, it appears that the trends for near future point to a rise in prices.