Israeli Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich have announced an agreement to cut the excise tax on fuel, lowering the price of petrol by NIS 0.50 per litre. Signed by Bezalel Smotrich on Sunday 4 October 2026, the order takes effect at midnight, at the start of 5 October. The maximum self-service price of a litre of 95 unleaded falls from NIS 8.27 to NIS 7.77.
What the order signed by Bezalel Smotrich provides
The order targets the fuel excise tax, the duty the state collects at the pump. It brings the maximum price of 95 unleaded down from NIS 8.27 to NIS 7.77 per litre, a reduction of NIS 0.50, or slightly more than 6% of the price displayed before the measure (0.50 divided by 8.27).
The Prime Minister's Office justifies the decision by the surge in global prices: "At a time when fuel prices are soaring all over the world, we are ensuring that they do not soar in Israel." In the same statement, Benjamin Netanyahu and Bezalel Smotrich also highlight Israel's electricity prices, which they credit to the development of natural gas reserves and to competition in electricity production.
In Eilat, a VAT-exempt zone, the maximum self-service price of 95 unleaded is set at NIS 6.58 per litre, down 43 agorot (NIS 0.43) from the previous update. Full service adds 26 agorot per litre including VAT, unchanged.
A second excise cut within a month
This measure follows a first temporary excise reduction, signed in September. On 1 September, the price per litre had risen by NIS 0.16 to NIS 8.25, a record. Bezalel Smotrich then ordered a two-month cut in the excise of NIS 0.50 per litre, which brought the price down to NIS 7.75. At that point, the excise, known in Israel as the "blu" tax, accounted for 44% of the price, or NIS 3.66 per litre, compared with 15% for VAT and 33% for the global price of oil.
That effect was nevertheless cancelled out by the rise in the maximum price: it increased by NIS 0.52 to NIS 8.27. The Energy Ministry points to a 13% jump in global petrol prices amid supply chain disruptions and instability across the Middle East. A US dollar up by about 3% against the shekel also contributed to the rise in fuel prices in Israel.
With the new order, the price of NIS 7.77 sits only NIS 0.02 above the NIS 7.75 level that preceded this increase. The first excise reduction expires at the end of October, and it is not yet known whether it will be extended.
Why petrol prices have risen so sharply
Petrol prices have risen considerably worldwide since the start of the war against Iran in late February 2026. Tehran's blocking of the Strait of Hormuz has choked off this strategic route for oil and gas supplies. Ongoing tensions between the United States and Iran over control of the strait also continue to fuel uncertainty in the oil market.
To understand why this waterway weighs so heavily on prices, see our analysis (in French) of the Strait of Hormuz and oil chokepoints.
What it means for a full tank
As an illustration, here is the difference on a 50-litre tank of 95 unleaded, calculated from the two announced maximum prices (indicative calculation, excluding any other price change):
- Before the order: 50 litres × NIS 8.27 = NIS 413.50;
- After the order: 50 litres × NIS 7.77 = NIS 388.50;
- Difference: NIS 25, or NIS 0.50 per litre.
Recent changes in the maximum price
The published figures make it possible to reconstruct the recent path of the maximum price per litre of 95 unleaded in Israel:
- NIS 8.25: price on 1 September, after a rise of NIS 0.16;
- NIS 7.75: price after the first excise cut of NIS 0.50;
- NIS 8.27: price after the rise of NIS 0.52;
- NIS 7.77: price when the new order takes effect, at the start of 5 October.
Other governments are turning to taxes in the face of the surge
Israel is not the only country adjusting taxes to contain pump prices. In Europe, Italy opted for a targeted cut in excise duty and VAT on diesel (article in French) of about 17 cents per litre, extended until 25 August 2026 by Giorgia Meloni's government. Rome concentrated its support on diesel rather than petrol.
To follow price trends in the countries around France, our fuel price comparison for Europe lets you compare price levels country by country.