The Gas Shocks of the Future Are Here Today in Israel

by Eric Hammer | FTMDaily Contributing Writer

TEL AVIV, Mar 3 – You walk up to the gas pump and check the price. $7.94 per gallon the meter reads. You shrug and begin to fill up your tank, watching in numbed silence as the numbers race by. By the time you’re done, the total cost to fill up your tank of gas is $238.20. A fantasy? A dystopian future world? Nope. This is Israel circa 2011 and it could well become America circa 2012 if the Middle East crisis continues to roil world oil markets. Here’s how Israelis cope.

“I just bought myself a scooter. It gets 25 kilometers per liter [about 60 miles per gallon],” Yossi, who lives in central Israel explains. He used to own a 4 door sedan, but finally sold it and bought a scooter instead. “The cost of the car was just getting to be too much,” he says sighing. “I couldn’t keep up, so I sold it and bought the scooter to get to work instead.”

Asked what his family does to get around now, Yossi shrugs. “They take the bus. On Shabbat [Saturday, when public transportation doesn’t run] they stay home or they walk. We can’t afford to spend the money for the car anymore. It’s not just the cost of the gasoline. It’s also the insurance and the upkeep. I make 8,000 shekels a month [about $2,200] and I just can’t justify paying so much for the car anymore.”

At this point, Yossi’s wife, Sara walks in with a few cups of sweetened tea. “The bus is terrible in the morning,” she complains. “He goes to work early on the scooter, but I have to take the bus after I get the kids off to school. It’s always so crowded and sometimes they don’t stop because there are too many people, then I get to work late.”

This is the reality most Israelis live with today. Even though Israel is a Western style, developed country where car ownership has increasingly come to be seen as a necessity rather than a luxury, rapidly rising gasoline prices are changing the landscape of this tiny, congested nation and making people search for alternatives to the cars they’ve come to rely on as their standard of living has improved over the past twenty years.

Even before the recent run up in gasoline prices, the cost of owning a car was prohibitive – 80% taxes and high gasoline prices mean that large, luxury vehicles are all but unheard of here. Instead, the norm is to see tiny, European style cars flitting around Israeli streets, with scooters like Yossi’s increasingly becoming the norm as Israelis adjust to skyrocketing prices for crude oil.

And while Israelis may gripe about the higher prices here, they get along and continue to live life the same way they always have, tightening their belts and driving a bit less perhaps, but living life because that’s what they do.

Back home in the United States, a number of economists are predicting that $8 per gallon gasoline could rapidly become the norm, especially if the Middle East crisis continues to spread and oil producing countries becoming radicalized and stop selling oil to the United States.

However, even if things eventually do settle down, no one expects a return to the salad days of $1.50 per gallon gasoline meaning that we had all best start learning to love scooters and smaller cars, unless we want to spend $232 twice a week to fill up the tank on our SUVs and full size sedans.

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