Electricity and Water Tariffs to Increase
Since the beginning of this year, domestic water prices have increased by 4.5% and household electricity prices have increased by 2.9%.
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Despite a consistent decline (about 30%) in the past 5 years, water prices have increased by 4.5% since January. According to the Water Authority, the rise occurred as a result of the jump in electricity prices due to Israel’s increased need for desalination. Israel relies heavily on obtaining water through desalination because of its limited natural water sources.
As of January 1, the price of water for consumption of up to 7 cubic meters per capita per month (the low tariff) increased to NIS 6.881 per cubic meter, instead of NIS 6.608 per cubic meter. For quantities exceeding 7 cubic meters (the high tariff) the price will be about 12.995 shekels per cubic meter instead of 12.443 shekels per cubic meter.
The change in the tariff for an average family of four, assuming they consume 15 cubic meters per month, is an additional NIS 45 ($13) a year.
The Electricity Authority also raised the electricity tariffs for the household consumer by 2.9% due to the increase in the tax rates on coal, changes in the exchange rate, and the significant increase in renewable energies. Had it not been for the State's intervention in the electricity rate, the electricity tariff would have risen by 7.3%.
The rise in cost of these utilities created a vicious cycle wherein the large manufacturers and suppliers in the market also increased their prices, with the unfortunate result that the family shopping basket has become more expensive by tens of percent.
Data from the StoreNext research firm show that the family shopping basket has increased this year by NIS 1.6 billion, compared to 2017.
"Israeli Shortcut" chairman notes that "the steep rise in market prices affecting the consumer's pocket will undoubtedly affect potential olim who are thinking of coming and settling in Israel but are hesitant when they see the high cost of living in the country."