The winter of discontent is upon us, and it's not just the weather that's cold. Consumers are facing a harsh reality as prices soar across the board, leaving them shivering in the face of rising costs. From fuel to food, energy to groceries, the cost of living is skyrocketing, and it's not showing any signs of slowing down.
One of the most visible impacts is the surge in fuel prices. Just a few months ago, a barrel of Brent crude oil was costing around $73. Fast forward to today, and it's hovering near the $85 mark. This has translated into higher prices at the pump, with diesel jumping from around €1.70 a litre to over €2, and petrol not far behind at around €1.95 a litre. At the peak of the price jump, diesel was costing over €2.30 a litre, and petrol was above €2 a litre. But, for now, motorists are breathing a sigh of relief thanks to temporary excise cuts that are insulating them from the full brunt of these increases.
However, this relief is temporary. The reductions in excise duty, which were introduced in April, are set to end in September. After that, both diesel and petrol prices are expected to go back above €2 per litre, and possibly even higher, given the ongoing conflict in the Middle East and its impact on oil prices. To make matters worse, another carbon tax hike is on the horizon, adding around 2.5 cents to a litre of diesel and 2.1 cents to petrol. This will be part of the October budget and will further burden consumers.
The impact of these price hikes is not limited to fuel. Home-heating fuels are also set to become more expensive from October. The carbon tax on home-heating oil, gas, and solid fuels was originally due to increase in May but was deferred until October due to the severe energy-cost inflation at the time. When it finally kicks in, the rise will add roughly €17 to the average household's gas bill, €22 to a 1,000-litre fill of home-heating oil, and 90c to a 40kg bag of coal. The increase for home-heating oil, in particular, may be tough to absorb, as the cost nearly doubled from below €1,000 to around €1,800 between February and April, and has since come back to around €1,300.
The effects of these price hikes are already being felt across supply chains. As producers and suppliers pass on the increased costs to consumers, we can expect to see more price rises in supermarkets. This is similar to what happened after Russia's invasion of Ukraine in 2022, which triggered a global spike in energy costs and led to general annual food-price inflation of over 5%. Some foods, like beef and dairy products, saw even more significant increases, with beef jumping by around a quarter and dairy products seeing double-digit increases.
While food-price inflation has moderated since the start of 2026, with the annual increase coming in at just 0.6% in June, the latest round of energy price hikes could have a significant impact on supermarket prices as winter sets in. The autumn has traditionally been the time for energy price hikes, and with the squeeze on fossil-fuel availability due to the limited transit of containers through the Strait of Hormuz, it's expected that household electricity and gas prices will also rise.
In recent years, energy providers have moved on prices in the autumn, blaming the higher cost of doing business. However, with strong competition among energy providers, shopping around if you're out of contract can help offset some of these price rises. While consumers are facing a challenging winter, it's important to remember that there are steps that can be taken to mitigate the impact of these soaring prices.
