Austrian energy prices fell in June, but future increases loom

Household energy costs in Austria saw a notable decrease in June, offering some relief after months of price hikes. The Energy Price Index (EPI) dropped by 3.1% from May, primarily due to falling prices for heating oil and fuels. This trend was linked to a temporary easing of tensions in global crude oil markets.

However, energy continues to be a substantial factor in Austria's overall inflation. Year-on-year, energy prices were still 5.4% higher in June. Mineral oil-based energy sources experienced significant price drops in June compared to May: heating oil fell by 11.6%, diesel by 7%, and super gasoline by 4.9%. Despite these monthly decreases, prices for these fuels remained considerably higher than in June of the previous year – heating oil by 32.6%, diesel by 19.2%, and gasoline by 12.8%.

Electricity prices for households saw a slight monthly increase of 0.2% in June but were notably 10.2% lower than the previous year, making it the only energy source in the EPI to show a significant annual decrease. Natural gas prices rose slightly by 0.1% month-on-month and were 4.6% higher than a year ago. District heating prices remained stable monthly but increased by 1.9% compared to the previous year.

Looking ahead, energy experts anticipate further price increases. The June respite was attributed to factors like a temporary de-escalation in the US-Iran conflict and increased shipping through the Strait of Hormuz. Lukas Zwieb, an energy expert at the Energy Agency, noted that renewed hostilities have already led to price surges in international crude oil markets and at domestic gas stations, suggesting a reversal of the downward trend.

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With the resurgence of hostilities, significant price increases are now being observed again in international crude oil markets as well as at domestic gas stations.