In a long-awaited reform, Israel’s electric industry will be opened to competition this summer for the first time since the establishment of the state, the Ministry of Energy and Infrastructure announced on Tuesday.
The move, which will end the Israel Electric Corporation’s 75-year-old total monopoly, will enable all residents to choose their electricity supplier.
The ministry said the competition will cause electricity prices to drop as much as 20%, saving families hundreds and even thousands of shekels a year.
“The reform is good news both for the consumer public and for companies that supply electricity privately,” said Amir Shavit, chairman of the Electricity Authority.
Earlier this week, Globes reported that Israelis will pay more for utilities and fuel in 2024 as the fiscal deficit has widened, chiefly due to the war against Hamas in the Gaza Strip.
One of the biggest increases is the price of gasoline. The cost of unleaded 95 octane gasoline rose 0.28 shekels per liter to 7.22 shekels, or $1.98 per liter ($7.50/U.S. gallon), the highest price in 18 months, Globes reported.
Electricity rates jumped on Feb. 1 by 2.6%. Water rates rose 0.7%, completing a rise of 5.9% over the last two years.
The war has seen an explosion in government spending. January saw an increase of 36% from January 2021. Subtracting war-related expenditures, spending would have risen by 14.6%, the Finance Ministry said.
Israel’s fiscal deficit, the gap between government revenues and spending, grew to 4.8% of GDP at the end of January.
