Consumers Caught Unaware
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Consumers Caught Unaware

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The Israeli driver who was not sufficiently prescient–or fast enough–to fill up his tank yesterday before supplies were sold out, found this morning that he had to pay $2,20 for a gallon of gasoline, an overnight price hike of 20 percent.

The Israeli housewife who failed to order a new container of cooking gas last week, will have to pay nearly a dollar more for a tank this week. A tank of bottled gas now costs nearly $5 and with cooler fall weather approaching, Israelis who use gas to heat their homes can calculate on a 20 percent increase in costs. The price of electricity has gone up by nearly 30 percent and water rates by 25 percent.

Increases of five percent were expected in the prices of cleaning materials, cheaper wines, textiles, clothing and household articles. Such are some of the effects on the Israeli consumer of last night’s Cabinet action.

Israelis who do not own a car will be somewhat better off than their fellow citizens who do because the government will continue to subsidize public transportation–chiefly the bus cooperatives–which will keep fares at their present levels for the time being. But taxis which are not assisted by the government will have to raise their tariffs because of the sharp hike in gasoline prices.


Would-be car owners are especially hard hit. A tiny Volkswagen “Bug” now costs about $8500. Appliances, most of which are imported or assembled from imported parts, were beyond the reach of many Israelis before the latest devaluation and taxes. Now they are even most costly. A black-and-white television set, previously priced at about $430 now costs about $500.

This morning saw a rush on electric appliance dealers. Refrigerators, kitchen stoves, air conditioners and television sets were up in price by IL 500-IL 1500 this month and the government imposed an additional 10 percent sales tax last night. But as long as present stocks hold out, retailers are selling them at the old prices. There were no price increases in clothing and furniture stores which suffered a recession last month and there was no rush to buy those items.

The new price lists are enough to make the average person nervous, not to mention cigarette smokers who will have to pay more than 50 cents for a package of the better local brands. The only area where the old prices hold is the sluggish housing market. Although the price of many construction materials has gone up, contractors are expected to absorb the increases to stimulate sales. But some contractors have announced that they may have to raise the price of flats.

Representatives of all airlines serving Israel decided at a meeting today to increase fares by 11.5 percent effective at midnight. That is likely to keep many Israelis from travelling abroad which should help the government conserve foreign currency. But the new measures are expected by many economic analysts to set off a new round of inflation.

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