The price of water for household consumption is expected to rise by about 3%-4% at the beginning of 2025, according to the proposal put forth by the Water Council earlier this month. The Water Authority explained that the increase is a result of the rising cost of desalination, investment in expanding infrastructure, and inflation.
According to the statement from the authority, the price of water for a family of four, which consumes around 4,200 gallons each year, is expected to rise from 122 shekels ($33) per month to 127 shekels ($35) per month.
Even with this increase, the price of water for household use in Israel is still lower than that of most of the Western world. But Israeli consumers already faced a 1.6% water price hike in July 2024 and are also dealing with rising costs of public transit and gasoline.
Since the early 2000s, the water sector in Israel has operated within the framework of a closed economy, whereby the price of water for consumers fully reflects the cost of its production without government investment in infrastructure. With this model, all improvements to infrastructure are pre-funded by the cost of the water and paid for by the consumers. Thus the cost is shifted away from the government and back to the consumer.
This system is relatively balanced, and the water sector in Israel is considered one of the most effective in the world. However, it exposes Israeli consumers to the volatility of market prices, especially the price of electricity, which also rose this year. It also does not allow for large-scale investments that could lead to higher efficiency and price reductions in the long term, since the consumer would have to pay heavily in the short term.
Energy Minister Eli Cohen reportedly made efforts in July to prevent a significant price increase of about 7%-8%. He requested to use the reserves accumulated by the Water Authority from the sale of a desalination plant in Ashdod to moderate the price increase, which ultimately amounted to only 1.6%. However, this lower price increase was only temporary, as will be reflected at the start of the next year, since there was no fundamental change to how the government invests in the sector.
This article was translated from Hebrew by Tzivia Gross.
