Germany: Inflation Rose in August, Fuel Prices Near Record Highs

Consumer prices in Germany rose by 2.9% year-on-year in August, according to preliminary data from the Federal Statistical Office. In July, the inflation rate stood at 2.8%.

Core inflation, which excludes food and energy prices, also climbed to 2.4%. Key factors behind this development include energy costs, while tensions and disruptions along international transport routes have made oil more expensive and directly affected German consumers.

Experts estimate that inflation may remain above the European Central Bank’s 2% target for some time, even if oil shipments through the Strait of Hormuz return to normal and energy prices fall.

Jörg Krämer, chief economist at Commerzbank, attributes this forecast to the fact that a growing number of companies are being forced to pass on to customers the higher energy costs they have faced recently. This pressure is clearly evident at filling stations.

ADAC data show that a liter of Super E10 gasoline sells for an average of €2.153, around five cents below the record set in March 2022. The average price of a liter of diesel is €2.202.

The highest price was recorded in April this year, when a liter cost €2.446. Fuel prices are also being driven higher by extremely low water levels in the Rhine River, which are hampering river transport and supplies to refineries, particularly in the state of North Rhine-Westphalia.

As one of Europe’s main inland transport corridors, the Rhine is facing navigation restrictions. These obstacles are increasing supply costs and adding pressure on prices.