The answer is very simple, TAXES.
The current price of NIS 5.49 for 1 liter of 95 octane gasoline, is composed of the following:
Price of the actual gas per liter: NIS 1.66
Marketing costs (gas station profits): NIS 0.68
Excise tax: NIS 2.42
VAT tax: NIS 0.73
In other words the real cost is NIS 2.34, the other NIS 3.15 is taxes. In percentage terms taxes are a whopping 57% of the total price.