After the cost of his cigarettes nearly tripled, 18-year-old Jihad Ahmed now buys just a few at a time instead of a pack and smokes them sparingly.
Imad Shalbiya, who sold them to him, said Egypt's crackdown on cross-border smuggling tunnels was behind the price hike.
"The tunnels from Egypt have been closed, hitting stocks of cigarettes in Gaza hard and sending prices soaring," he told AFP.
Israel first imposed a blockade on Gaza in 2006 after militants there snatched one of its soldiers.
It was tightened significantly a year later when the Islamist movement Hamas seized control of the territory, which is home to 1.8 million people.
But some relief came through a honeycomb of tunnels from Egypt that brought in a wide range of consumer goods, livestock, fuel, as well as arms and money for militant groups.
Smuggling of building materials alone was worth more than one billion euros annually, according to Ayman Abed of the economy ministry in Gaza.
But the Egyptian military, which began a process of shutting down the tunnels after it overthrow Islamist president Mohamed Morsi in July 2013, stepped up its activity significantly in late October after militants in northern Sinai killed some 30 Egyptian soldiers.
Since then, it has been demolishing houses along the border to build a buffer zone in a region that has been rocked by insurgency since Morsi's ouster.
So far, Egypt has destroyed 1,600 tunnels. In late October it also closed the Rafah border crossing, Gaza's only gateway to the world not controlled by Israel.
"Prices are very high since Egypt completely closed the tunnels," said Abu Mohammed, who owns a small supermarket west of Gaza City, noting hikes in the price of "milk, legumes and even cheese."
"We used to sell Egyptian cheese for 10 or 11 shekels; now it is more than 23 (about $6 or nearly five euros). I don't sell it anymore. No one buy it at this price."
And Mohammed Safi, who owns an electronics shop, said: "Prices of mobiles are higher since the blockade of tunnels. We can't get them as before. We used to sell iPhone 5s for 2,200 shekels, now the price is 2,600."
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Products entering from Israel are far more expensive than those originating in Egypt, and largely beyond the means of the average Palestinian in the crowded coastal territory, where youth unemployment is running at 63 percent.
Oxfam says more than 40 percent of the overall population is jobless and that 80 percent live on humanitarian aid.
The lack of cement and gravel to feed the construction industry accounts for 35,000 of Gaza's unemployed, Abed of the economy ministry said.
During last summer's war with Israel, UN figures show that around 20,000 housing units, or nearly six percent of the housing stock, were severely damaged or destroyed. That resulted in more than 100,000 internally displaced persons.
Tens of thousands of other homes were damaged in the conflict and are still awaiting repairs and renovation.
But since fighting ended on August 26, only 1,300 tonnes of building materials have crossed into the Strip, Palestinian officials say.
"That's not enough to put up a single building," according to Gaza builders' merchant Suheil Tuman.
When distributed through the UN agency for Palestinian refugees (UNRWA), a 50 kilogramme sack of cement sells for 5.50 euros. But the price is 42 euros on the black market.
"When the tunnels were open, a tonne of cement sold for 380 shekels (80 euros) on the black market," Tuman said. "Today it is 3,800 shekels."
Economist Amr Shaabane said the economic situation "is literally disastrous. It has never been this bad in Gaza."
The reasons? "The blockade, poverty, unemployment, the trickle of goods entering and soaring prices."
In the past, Gaza prices had always been far lower than in the occupied West Bank and Jerusalem.
"Today, Gaza market stalls offer Israeli goods at a price that is more expensive to begin with and to which heavy taxes are added on their entry to Gaza," the economist said.