Fuel, bills, spending and mortgages: the conflict in the Middle East is driving up prices and energy. Petrol towards new increases, gas at highs and inflation starting again. The bill for Italians grows every day.
The war in Iran forcefully enters the pockets of Italians. It is not just a geopolitical crisis, it is a conflict that is reflected in real time on energy, bills, fuel, spending, mortgages. The risk today is that of a real blow for consumers: rising energy prices, inflation that is already accelerating and purchasing power that is diminishing. The numbers speak for themselves: between fuel, bills and indirect price increasesthe blow already exceeds 800 euros a year according to Codacons estimates. And the bill is destined to rise day by day. The forecasts on bills I am an example of this. Facile.it’s estimates yesterday spoke of increases of 166 euros and today, on the fifth day of the war, we are already at 369 euros.
Accelerating inflation: +1.6% per year, cart at +2.2%. Effects of the war on the shopping receipt
Brent surpassed 80 dollars a barrel after having already reached 73 before the military escalation, while European gas traded in Amsterdam jumped up to 63.49 euros per megawatt hour, with a surge of 41% in a few hours. The de facto blockade of the Strait of Hormuz, a hub through which around a fifth of the world’s oil passes, has sparked fears among operators.
And all this happens while Italian inflation accelerates. In February the Nic index recorded +0.8% on a monthly basis and +1.6% on an annual basis. The shopping cart rose to +2.2% (from 1.9%), with unprocessed food jumping to +3.6% compared to +2.5% in January. Vegetables, tubers, bananas and legumes, which were declining at the beginning of the year, rose to +2.2%; half a point more also for fish products. These are data that do not yet incorporate the full shock of the Iranian crisis. Consumer associations warn that it could be much worse: Assoutenti speaks of “very strong repercussions on retail prices” due to higher transport costs and the surge in raw materials. For the February increase alone, the estimated additional expenditure is around 250 euros per family on an annual basis.
Fuel: petrol at 1,693 euros per liter and higher prices on the way
The first tangible effect is seen at the petrol pumps. Self-service petrol rose to 1.693 euros per litre, self-service diesel to 1.753 euros. On the motorway it costs 1,787 euros for self-service petrol and over 2 euros per liter for self-service petrol. The main brands have already adjusted their price lists: Eni has increased petrol by 2 cents and diesel by 7, IP up to +10 cents on diesel, Q8 and Tamoil with similar price increases. Brent above 80 dollars and diesel above 1,000 dollars a ton are progressively passing on the increases to the pump. Estimates speak of at least 10 cents more per liter for diesel. But in a worst-case scenario, with a prolonged shutdown of Hormuz and oil above $100-130 a barrel, gasoline could rise 30-40 cents a liter in the coming weeks. A 50-litre tank would cost up to 20 euros more.
And since in Italy almost all goods travel by road, the effect is quickly transferred to consumer prices. Defense Minister Guido Crosetto spoke of possible increases in transport costs of up to 30-40%. A dynamic that puts pressure on the entire production chain.
Bills: from +166 to +369 euros in one day
If fuel is the immediate impact, bills represent the heaviest and most structural one. Facile.it analysts estimated just yesterday an increase of 166 euros per year for electricity and gas. Today, on the fifth day of conflict, the forecast has already risen to 369 euros: 278 euros more for gas (against the 121 initially estimated) and 91 euros for electricity (yesterday they were 45). The overall bill for a typical family (with consumption of 2,700 kWh of electricity and 1,400 Scm of gas) would reach 2,796 euros a year, 15% more than the 2,427 euros expected before the outbreak of the war. Just a few days ago the estimated increase was 7%. The impact especially affects those who have an indexed tariff. Codacons estimates that a family with two children could spend between 210 and 380 euros more per year just for electricity and gas. Those with a fixed price contract are protected until expiry, but blocked offers are becoming increasingly rare on the market.
Gas is the real special watch: prices have exceeded 60 euros per megawatt hour, the highest since August 2022. What is worrying is the stop of a key LNG plant in Qatar and the uncertainty over the reopening of the Strait of Hormuz. Even if Brussels excludes immediate risks on supplies (the European Union imports 64% of its LNG from the United States and 5% from Norway) the problem is price, not quantity.
Mortgages and rates: the indirect effect of war
The chain doesn’t stop at fuel and bills. More expensive energy means higher inflation. And when inflation rises too much, central banks can intervene on rates. Operators have started to price in a possible ECB tightening by the end of the year: at the moment the estimated probability is around 25%, but everything will depend on the intensity of the crisis. If the cost of money does not fall, or even rises, mortgage repayments risk remaining heavier. For those with a variable, even a few decimals can translate into hundreds of euros more per year.
Tourism and a sting on holidays as early as Easter
Meanwhile, tourism is already experiencing price tensions. In February, accommodation services increased by 10.3% on an annual basis and transport by 3%: this is the Winter Olympics effect. But now the increase in fuel prices and international difficulties risk worsening the situation. Airlines must absorb higher fuel costs and cancellations in Middle Eastern countries. Confesercenti estimates that the deterioration of the international outlook could reduce tourism spending in Italy by 1 billion euros in the next two months. Prices of trains, planes, hotels and holiday homes therefore risk remaining under pressure, also because the “high” Easter at the beginning of April anticipates seasonal adjustments.
