Fuel skyrockets by 37 percent – inflation rises to its highest level in almost three years

Record high prices for gasoline and diesel pushed inflation in Germany to its highest level in almost three years in September. Goods and services rose in price by 3.3 percent compared to the same month last year, after 2.9 percent in August, as the Federal Statistical Office confirmed its earlier estimate on Tuesday.

The last time there was a higher value was in December 2023. “The development of energy prices was once again responsible for the increase in the inflation rate,” said the President of the Statistics Office, Ruth Brand. “The increase in prices was particularly noticeable for mineral oil products at gas stations and for heating oil.”

Fuel prices rose by 37.1 percent in September compared to the same month last year, and heating oil even rose by 74.9 percent. Due to the war in the Middle East, oil prices temporarily rose above the $100 per barrel mark. That's why, according to the ADAC car club, record prices for diesel and gasoline had to be paid at the pumps several times in September.

The expensive fuel has made the federal government take action. A new fuel discount will apply from October 1st until the end of the year - a subsidy that was already in effect in May and June. Economists expect this to reduce fuel prices by up to 17 cents per liter and thus the inflation rate by around 0.3 percentage points.

Energy as a whole rose by 14.9 percent in September compared to the same month last year, after 10.5 percent in August. That was the biggest increase since February 2023. Food costs an average of 0.4 percent more (August: +0.1 percent). Eggs (+15.2 percent), fresh vegetables (+12.0 percent) and fish, fish products and seafood (+4.5 percent) became significantly more expensive, while butter (-29.5 percent), fresh fruit (-4.9 percent) and dairy products (-5.5 percent) cost less.

2.7 percent more were charged for services (August: +2.8 percent). Services of social institutions (+6.3 percent), maintenance and repair of vehicles (+4.7 percent) as well as visits to the hairdresser and other personal care services (+4.3 percent) cost noticeably more, as did package holidays (+3.8 percent).

Prices excluding food and energy, also known as core inflation, rose again by 2.4 percent. From August to September, consumer prices rose by a total of 0.6 percent. Since inflation is likely to rise overall in the euro zone, economists are expecting further interest rate increases by the European Central Bank (ECB). This has already raised its key interest rate twice this year - to currently 2.50 percent.