Inflation in Germany reached 2.9 percent in April 2023, the highest level in two years. This marks a significant increase compared to previous months when prices had stabilized after years of high inflation. The main causes for this rise are the high fuel prices and increasing energy costs, exacerbated by the Iran war and the blocked Strait of Hormuz.
Professor Lena Dräger from the Kiel Institute for the World Economy explained, “Energy prices will remain high as long as the Strait of Hormuz is blocked.” Drivers currently face a price increase of 20 to 30 cents per liter at gas stations, despite the existing fuel discount. Compared to the same month last year, fuel prices have risen by 20 to 40 percent.
The blocked Strait of Hormuz is crucial for global oil transport, as it accounts for a quarter of the world’s oil and a fifth of liquid gas shipments. The destruction of production and processing facilities in Iran has further worsened the situation. Dräger emphasized that it will take some time for shipping traffic to normalize, even if the strait is reopened.
Other products, such as canned fruits, coffee, and cocoa, are also significantly affected by inflation, showing similar inflation rates as fuel. However, these price increases are not solely due to the Iran war but also to poor harvests in the past.
