At long last, Israelis will feel the effects of sinking oil prices, coupled with the benefits of the major gas finds off the Israeli coast.
Next Sunday, on Rosh Hashana eve, electricity prices for homes will fall 6.2%, while the rate for businesses will fall 6.8%. The decision was announced Monday by the Utilities Authority.
The price cuts are part of a new trend of falling energy prices in Israel. According to the Israel Electric Company, power prices have fallen by 15.6% since the beginning of 2015.
The reasons for the fall in prices has been threefold; the oil and coal used by the IEC to produce electricity have fallen in price significantly in recent months, part of a general trend towards softer prices in commodities. The IEC has also begun using natural gas drawn from the Tamar gas field to produce electricity, which has brought down prices further. In addition, the soft dollar has depressed prices in foreign currency.
The IEC expressed its opposition to the price drop, saying that it was “too aggressive and sudden,” and that the IEC was owed funds by the government and by private electricity producers who have failed to pay for the services the IEC rendered in helping them produce power.
While the fall in prices appears dramatic, many consumers have asked why prices have not fallen even further, given the freefall in commodity prices, especially oil.
With oil selling for less than $40 a barrel, many consumer advocacy groups have inundated the government and Knesset members for demands into the failure of utilities, including the IEC and gasoline chains, to pass the savings in commodity prices onto the consumer.
The Knesset is set to discuss the matter in its winter session after the conclusion of the High Holidays, a Knesset spokesperson said.