Consumers brace for higher prices on fuel, energy, and food this winter

Consumers are bracing for a "winter of discontent" as prices for fuel, food, and energy continue to climb. The cost of diesel and petrol is projected to surpass €2 per liter by the end of the year, driven by the planned unwinding of temporary excise duty cuts and an upcoming carbon tax increase.

The government's excise duty reductions on fuel, implemented in response to soaring oil prices, are set to expire in September. Their removal, coupled with a carbon tax hike scheduled for October, will push prices back above €2 per liter. This increase is further complicated by ongoing volatility in Middle Eastern oil prices, which saw Brent crude spike significantly earlier this year.

Home-heating fuels are also expected to become more expensive from October. A deferred carbon tax increase will add approximately €17 to average gas bills and €22 to a 1,000-liter fill of home-heating oil. This comes after the cost of home-heating oil nearly doubled between February and April, and could spike again due to geopolitical instability.

These rising energy costs are already beginning to impact supply chains, suggesting that producers and suppliers may pass further increases onto consumers, exacerbating food price inflation.