Cost of living: Petrol crosses €2 per litre in some parts of Austria

Ongoing inflation resulting from the Covid pandemic alongside the Russian invasion of Ukraine have pushed petrol prices above €2 per litre in Austria for the first time.

Petrol prices are spiking in Austria. Photo by Dawn McDonald on Unsplash
Petrol prices are spiking in Austria. Photo by Dawn McDonald on Unsplash

Prices north of €2 per litre have been seen in several petrol stations across Austria, including in the states of Vienna and Tyrol. 

Inflation has been on the rise across Europe in recent months, fuelled primarily by the impacts of the Covid-19 pandemic and the subsequent measures taken to prevent the spread of the virus. 

2021 had the highest rate of inflation seen in Austria for a decade, with a steady rate of 2.8 percent seen across the country. 

Cost of living in Austria: 2021 inflation at highest level in a decade

In early 2022 however, Russia’s invasion of Ukraine and the subsequent global instability have placed additional inflationary pressure on petrol prices. 

In addition to concern surrounding Russian oil and gas imports, global markets have been spooked by the conflict, resulting in an increase in prices. 

The EU is considering a ban on Russian oil imports as part of tightening sanctions on the aggressor nation. 

To counter the impact, Austrian authorities have already sought to broaden sources of oil and gas, including from the Middle East. 

READ MORE: How reliant is Austria on Russia for energy?

What can Austrians do to minimise the impact of rising petrol prices? 

While pressure is rising on Austria to reduce VAT or remove it completely, the government has said it is not contemplating these steps at present. 

One major consequence of increases in oil prices has been a spike in ‘petrol tourism’, with Austrian residents visiting neighbouring countries to fill up. 

Crossing the border to Hungary is particularly popular, with the Hungarian government having put in place a price limit in November 2021. 

Lower prices in Slovenia have also sent motorists heading across Austria’s southern border, while lower taxes have also made Switzerland a popular destination. 

For tips on saving money on petrol in Austria, check out the following link. 

READ MORE: How to save money on fuel costs in Austria

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Cost of living: Why are restaurants getting more expensive in Austria?

Austria's June inflation is expected to be 8.7 percent, according to calculations by Statistics Austria - a record high in the country.

Cost of living: Why are restaurants getting more expensive in Austria?

The inflation rate for June 2022 is expected to be 8.7 percent, the Statistics Austria institute calculated as part of a flash estimate.

Compared with the previous month, consumer prices rose by 1.4 percent, Statistics Austria said. This is the highest level since 1975 or almost 50 years.

The wave of inflation has affected mostly energy and food prices in Austria but has now also arrived in the gastronomy sector, with increasing costs in bars and restaurants in the country.

“Inflation has picked up speed in almost all areas. In addition to recent increases in fuel and heating oil prices, we also see significant increases in restaurant and food prices”, according to Statistics Austria Director-General Tobias Thomas.

READ ALSO: EXPLAINED: How Austria’s new finance measures could benefit you

The main culprits of rising food prices in retail and restaurants are the more costly energy and fuel prices. As transport and production become more expensive, these increases cascade to gastronomy as well.

Additionally, packaging and logistics costs have also increased, directly affecting food prices, the Handelsverband (trade association) said.

“The war in Ukraine and China’s zero-covid strategy continue to put a massive strain on global supply chains,” said Rainer Will, Managing Director of the Trade Association, in a press release.

“We do not expect inflation to peak until the end of the year.”

READ ALSO: The essential products that are getting more expensive in Austria

The association added that the Ukraine war also increased prices for agricultural raw materials and fertilisers, making food production and distribution more expensive.

What is next?

Rising costs have already reached other sectors, including rental prices, as The Local reported.

Austrian Post has also said that there will be price adjustments in the parcel sector “in the foreseeable future”, though they have added that these will be “very moderate”.

Criticism from the opposition

The SPÖ, FPÖ and the Neos accuse the government of doing too little against inflation.

“There is not even a draft law for the abolition of the cold progression,” criticised Neos economic and social spokesman Gerald Loacker. “The government’s one-off payments help little to nothing,” said SPÖ social spokesperson Josef Muchitsch.

READ ALSO: EXPLAINED: The main Austrian ‘tax traps’ foreigners should be aware of

FPÖ leader Herbert Kickl spoke of “failure to help”. “The ’emergency measures’ decided in the special session the week before do not even deserve the name – the first money will not flow until August 2022 at the earliest.”, he said.

The federal government has announced a broad package to help ease rising cost of living with one-off payments and the end of the so-called “cold progression” when tax brackets do not take into account inflation changes.

READ ALSO: When will you get your cost of living ‘bonus’ payments in Austria?

Cost of living calculation

The quick estimates of Statistik Austria are based on the existing database at the time of publication, which includes about 80 to 90 percent of the prices necessary for the inflation calculation.

There may, therefore, still be deviations. For example, the quick estimate of inflation for May was initially 8.0 percent, but the value was later revised downwards to 7.7 percent.

The index level of the consumer price index and further results for June 2022 will be announced on July 19th 2022.