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Drivers in Germany face record fuel costs

Diesel is more expensive than ever at gas stations in Germany, while petrol prices are also approaching record highs.

A driver fills his car with Diesel
A driver fills his car with Diesel at a German petrol station. Photo: picture alliance/dpa | Carsten Koall

As of Sunday, the national price of a litre of Diesel was €1.555, according to the European motor association ADAC. This is just above the previous record price of €1.554 per litre set on August 26th, 2012.

For drivers of non-Diesel cars, there’s also little reason to celebrate, as petrol prices also look set to exceed previous records in the coming weeks.

The price of Super E10, a type of petrol with organic components, stood at €1.667 per litre on Sunday – just 4.2 cents short of its previous record price of €1.709, which was reached on September 13th, 2012.

Germany’s fuel prices have been on an upward curve for months. 

The main driver of this is the price of oil, which rose after last year’s Covid slump to hit multi-year highs on Monday.

In the case of Diesel, the problem has been compounded by the demand for oil for heating houses, which tends to rise in autumn and winter. Since the beginning of the year, the government’s CO2 tax – which currently stands at €25 per tonne – has also added around 6 to 8 cents to the cost of a litre of Diesel. 

READ ALSO: Why everything is suddenly getting so expensive in Germany

The development is particularly drastic when compared with the previous year. At that time, oil and fuel prices sunk dramatically due to the Covid crisis, before the trend started to reverse at the beginning of November 2020.

Debates over tax cuts

With consumer prices rising across the board in Germany, politicians are debating how best to ease the burden on cash-strapped households. 

Most recently, the outgoing transport minister Andreas Scheuer (CSU) called on the government to prepare short-term countermeasures – such as tax cuts – if energy and fuel prices continue to rise sharply.

A large part of the fuel price at the pump is taxes and duties. For Diesel, at the current price level, these include €0.25 VAT, around €0.47 mineral oil tax and the 6 to 8 cents from the CO2 tax.

With heating and energy costs placing pressure on households, the outgoing government is already looking for ways to ease the tax burden on companies in order to limit the price hikes.

On Thursday it announced plans to cut the EEG levy in order to provide relief for struggling energy consumers from next year. 

READ ALSO: Germany slashes electricity levy as energy prices surge

The EEG levy currently adds 6.5 cents onto the price of a kilowatt hour of electricity in Germany. This is used to support to support businesses in the renewable energy sector.

From 2022, however, the levy will be reduced to 3.72 cents per kilowatt hour, with the difference partially made up by goverment subsidies. 

If a similar thing is done in for car drivers, this could see prices fall once more – though the change would not take effect immediately, as the savings for providers would take a while to be passed on to consumers. 

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MONEY

REVEALED: The everyday products getting less expensive in Germany

Inflation rates are soaring in Germany - but the jump in prices hasn't affected all consumer goods. Here are a few of the thing that have actually become cheaper in recent months.

REVEALED: The everyday products getting less expensive in Germany

The cost of living is rising at an alarming pace. In April, the inflation rate in Germany hit a stunning 7.4 percent – the highest it’s been in more than 40 years.

In real terms, that means that many people will be getting poorer year by year, unless they’re lucky enough to have got a stellar pay rise at work. 

When you dig down into the nitty gritty of the price rises though, the cost hikes are quite unevenly spread across different goods and services. 

The Local has reported regularly on the dizzying rise in the cost of fuel and energy, as well as the food items – like milk and fresh meat – that are getting more expensive by the week.

READ ALSO: What to know about the latest price hikes in German supermarkets

In April, energy prices rose by 35.3 percent, while prices for heating oil almost doubled. Consumers also had to pay significantly more for fuel (38.5 per cent) and natural gas (47.5 per cent).

Meanwhile, the weekly grocery shop has also gone up in price, with food costs on average 8.6 percent more expensive than in April last year. Edible fats and oils (27.3 percent) and meat products (11.8 percent) were the items that went up most steeply. 

But not everything is going up in price so dramatically, and some everyday items have even got cheaper over the past few years.

Here’s what consumers in Germany are saving money on today compared to last year.

Digital services and software

Some of the biggest drops in prices over the past year have been in the online and digital sectors, which is great news for anyone looking to pick up a new entertainment system or a new Wifi contract for their home. 

According to the Federal Office of Statistics (Destasis), computer operating systems and other types of software saw the biggest drop in price between April 2021 and April 2022. In fact, people purchasing a software subscription or operating system this spring are likely to have paid around 14.3 percent less than customers who purchased the same software last year.

Destatis also noted that Wifi and internet services have become cheaper in recent months. Since April 2021, the cost of “wireless telecommunications services” (otherwise known as Wifi) has decreased by 2.4 percent, while “access to online services has internet” is 0.8 percent cheaper.

Anyone’s who’s been saving up for a new TV, DVD players or satellite dish will also be pleased to discover that these products currently cost around one percent less than they did in April last year. 

Other electronic devices such as headphones, headsets, e-book readers and digital picture frames fell in price by 1.3 percent between March 2021 and March 2022. Renting videos or DVDs became 0.8 per cent cheaper over the same period.

READ ALSO: 

Wine and sweet treats

While it’s true that most of the weekly grocery shop has gone up in price, some surprising items are actually cheaper now than they were a year ago.

In fact, you can get a romantic dinner for two today for less than you could a year ago, since a plate of seafood is 1.6 percent cheaper and a bottle of wine is 0.8 percent cheaper. Home bakers can also enjoy things like puff pastry and baking mixes for less.

People with a sweet tooth seem to be the biggest winners this year: they can now enjoy a bar of chocolate for less, since the price of chocolate has dipped by three percent since last April, and also make savings of 2.3 percent on any artificial sweeteners they buy. 

Milk and white chocolate bars on display in Berlin.

Milk and white chocolate bars on display in Berlin. Photo: picture alliance/dpa/dpa-Zentralbild | Monika Skolimowska

The other treat that is getting cheaper is ice cream. Just in time for summer, the cost of your ice-cream sundae or Eiskugel in Waffel (ice cream in a cone) has dropped by one percent. 

OK, it may only be a few cents lower, but we still think it’s a good reason not to feel guilty about treating to yourself to an ice cream on a sunny day. 

READ ALSO: German consumers to be hit by further price hikes in supermarkets

Household appliances

Though many household expenses have gone up this year, a few common household goods are currently bucking the trend. 

For soup and smoothie addicts, a staple appliance has decreased in price over the past twelve months. In fact, buying an electric mixer, food processor or blender will set you back 2.8 percent less this year than in April 2021.

Prices for electric irons (-0.5 percent), hoovers (-0.8 percent) and “other large household appliances” (-1.2 percent), which includes water softeners, sewing machines and safes, have also gone down.

READ ALSO: The products getting more expensive and harder to find in Germany

Home and contents insurance

At a time when people have been spending more time at home due to Covid-19, the cost of home-related insurance has gone down.

According to Destasis, the price of “insurance services connected with the dwelling”, which means home and contents insurance, has gone down by around 1.8 percent year on year. 

Glasses and contact lenses

Glasses and contact lenses can be a big expense for anyone who needs them, so people with less-than-perfect eyesight will be pleased to know that the price of both of these has gone down slightly in the past year.

As of April 2022, the price of glasses and contact lenses has gone down by around 1.8 percent on average. 

Designers sunglasses at an auction house in Cologne

Designers sunglasses at an auction house in Cologne. Photo: picture alliance/dpa | Oliver Berg

Clothes and shoes have also been trending downwards over the course of this year: back in February, women’s clothes were around 3.3 percent cheaper than they were in February 2021, while men’s clothes had dropped 0.7 percent in price.

Meanwhile, shoes would have set you back around 0.7 percent less on average, with women’s shoes once again showing the steepest decrease at minus 2.9 percent.

Children were the only demographic to buck this trend. In fact, children’s clothes had gone up in price by 1.6 percent in February and children’s shoes were up by 1.4 percent. 

READ ALSO: OPINION: Why Germany’s energy relief payouts are no fix for inadequate social security

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