Friday March 28 2025: Israel's national water company Mekorot reports record profits whilst Israeli citizens suffer with higher cost of water.
Cost of living increases in Israel as water bills rise by 4% in 2025.
Israel’s national water company, Mekorot, announced a net profit of about NIS 215 million for 2024, showing a 14% increase from NIS 189 million in 2023. The net profit for the company in the fourth quarter reached NIS 49 million, which also represents a 14% rise compared to the same quarter last year year.
Mekorot’s total revenue for 2024 reached NIS 5.36 billion, marking a 2.2% increase from NIS 5.25 billion in 2023, partly driven by a 4.9% rise in water sales. At the same time, sales costs fell to NIS 4.82 billion, from NIS 4.91 billion last year. Consequently, the gross profit reached NIS 531 million, showing a notable increase from NIS 335 million in 2023.
Meanwhile, according to a statement from Mekorot, 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.
Israeli families in 2025 face a significant surge in living costs across multiple sectors, which will put additional pressure on household budgets that are already stretched thin for many. Starting January 1st 2025, the VAT increase from 17% to 18% will affect prices across virtually all consumer goods and services. This change comes alongside numerous other price hikes in essential services that will impact daily life for Israeli families.
Basic utilities are substantially increasing, with electricity rates rising by 3.8%. Public transportation users will need to budget an additional 2 NIS per ride, while municipal property tax (arnona) will see its steepest increase in 17 years, jumping by 5.29%.
Public sector employees face particular challenges, with a 2.3% salary reduction – translating to approximately 290 NIS less per month for those earning an average wage. Adding to the burden, workers will lose one day of their convalescence pay (havra’a) for the second consecutive year, following last year’s contribution to the war effort.
Food costs are also expected to rise, with multiple manufacturers announcing price increases despite declining international commodity prices. For instance, while global soy and wheat prices have decreased, Israeli consumers haven’t seen corresponding reductions in related products. Major food manufacturers have now announced a new wave of price hikes ranging from 3% to 18% on various products. These increases will affect everything from dairy products and snacks to coffee, pickles, olives, and processed foods. While not all items in manufacturers’ product lines will see price increases, the changes will impact many household staples.
Vehicle test fees will increase from 97 to 117 NIS, and car insurance rates are expected to continue their upward trend.
On top of that, a number of companies have announced price hikes on their products entering into effect on January 1 2025, including a number of products from food giants Osem-Nestle, Strauss-Elite and Unilever.
For an average family, the utility increases could amount to an additional 100-150 NIS then together with the VAT going up could be another 150 ILS, and with the increase in food 100 ILS so in total this could be a couple of thousand more per year – a sum that might seem manageable for some households but could pose significant challenges for others, particularly those already struggling to balance their budgets.
“These price increases will affect different households in different ways, but it’s particularly challenging for families who live in overdraft and those who are already carefully managing their monthly budgets. The key is to compare prices, be more on top of your spending, and plan accordingly, that might mean spending less on discretionary expenses if there were any, it might mean looking to earn more. Consider moving to one of the alternative companies that now provide electricity (the price here is also going up, but there are about 5% less overall.
Israel holds the second position regarding the highest prices in OECD (Organization for Economic Co-operation and Development) relatively to income. For people who want to buy a home in Israel, 148 monthly salaries are necessary. In Israel there are high levels of income inequality, for example salaries in the technological sector are much higher than in other workforces.
Finally, Israel National News reports that capitalizing on last year’s successful launch of a concept store in Beersheba, offering significantly reduced prices across the board, the popular Israeli television show Hatzinor, and the Colel Chabad charitable organization have announced the planned opening of a second brick-and-mortar low-cost supermarket in the center of the country.
Guy Lerer, one of Israel’s most recognizable television personalities who hosts Hatzinor tweeted earlier this week, “They’ll continue to raise prices while we work for you.”
The second store, scheduled to open next month, is designed to provide consumers with significantly reduced prices for key products by circumventing many of the costs associated with overhead, branding, and marketing. The majority of products are manufactured and distributed by private label companies so that while they are often not well-known in the general market, they are able to be produced without compromising on quality.
“One of the missions of Colel Chabad is to provide support and opportunities for people who face deep economic challenges and food insecurity, and this store is motivated by that very mission,” explains Colel Chabad Director Rabbi Sholom Duchman. “A person is able to shop at the store, knowing that everything there is as low-priced as it can be, and will always be. Everyone should be afforded the opportunity to shop at low-cost supermarkets if they want or need to.”
The continued collaboration between Israel’s longest-running charitable organization founded in 1788 by the first Lubavitcher rebbe, and a leading media platform that organically reaches over two million people can be instrumental in reaching a massive audience and giving thousands of Israeli families the chance to feed their families in a more economic way. Additional stores are already being planned for continued national expansion in the years ahead.
“The result of the war and the national economic implications is that more and more people are struggling economically from raised prices and the overall increase in the cost of living,” says Rabbi Duchman. “This is the type of innovative response we need to bring the model of lower-priced food items typically found in the Hareidi communities to the masses. We give our special thanks to the Renner Family for their support of these supermarkets.”
Martin Blackham Israel First TV Program www.israelfirst.org