The Iran war made life in Germany skyrocketing in March. Massive increases in energy prices catapulted the inflation rate to 2.7 percent, the highest level since January 2024, as the Federal Statistical Office confirms preliminary calculations. In February, consumer prices were 1.9 percent higher than in the same month last year.
For the first time since December 2023, energy became more expensive – and significantly so: According to the information, the prices for household energy and fuels in March were 7.2 percent higher than in the same month of the previous year. “The significant price increases for energy products are driving inflation. Fuels and heating oil in particular have become dramatically more expensive for consumers since the beginning of the Iran war,” says the President of the Federal Statistical Office, Ruth Brand.
At the top were the annual price increases for light heating oil (+44.4 percent) and fuels (+20.0 percent). Prices per liter of more than two euros have been the norm at Germany’s gas stations for weeks. The 12 o’clock rule, which has been in effect since April 1st, has not changed this, and gas stations only allow price increases once a day, at 12 noon. Gas and electricity have also recently become significantly more expensive for new customers, but remain below the high values of the previous year.
Ceasefire gives hope
The agreement between the USA and Iran on a two-week ceasefire announced shortly after Easter gives hope that the higher energy costs will not affect other prices in this country to the same extent as feared.
In this context, Iran also announced an end to the blockade of the Strait of Hormuz, which is important for global oil and gas trade. As a result, oil became significantly cheaper on the world markets.
However, as long as the conflict in the Middle East is not finally resolved, uncertainty remains. In March, economists had predicted a further rise in consumer prices in Germany in April. With the start of the travel season, flight tickets and package tours could become more expensive.
Many households are already running out of money
The higher the inflation rate, the less people can afford per euro. In a Yougov survey commissioned by Postbank in March, one in eight (12.8 percent) of the 2,028 adults surveyed said they could barely afford the running costs of daily life. In households with a net income of less than 2,500 euros, almost one in four respondents (23.5 percent) says this. There is great concern about a new wave of prices.
