In the first half of 2026, prices for electricity and gas fell, but are still well above the level before the Ukraine war. Meanwhile, the Iran war is becoming the new price driver in the energy sector.

Like thatFederal Statistical Officeannounced on Wednesday that electricity and natural gas prices fell in the first half of this year. Compared to the second half of 2025, private households paid 5.3 percent less for gas and 6.4 percent less for electricity. Non-households – primarily companies – had to accept a slight increase of 1.8 percent in gas prices. In return, their electricity prices fell by a full 8.3 percent.

The reduced prices vary somewhat depending on consumption. When it comes to electricity prices in private households, for example, it is primarily heavy consumers who benefit, while prices for those who use less than 1,000 kilowatt hours annually only fell by around 2.5 percent. When it comes to gas prices, the situation is rather the other way round; low consumers saved more per kilowatt hour in the first half of the year.

The snapshot therefore shows a temporary reduction in energy prices. Overall, however, enormous price increases are still being felt since the outbreak of the Ukraine war and the associated sanctions on Russian oil and gas. The price of gas was also more than 80 percent higher than before the war in the first half of 2026, and electricity is also 16.4 percent more expensive.

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Oil as the new main driver of inflation

The price of oil, which played a particular role this year, is not included in this data. The attack by the USA and Israel on Iran and their counterattacks are causing a further price explosion here. The reason for this is, on the one hand, the blockade of the Strait of Hormuz, which prevents transport ships from leaving the Arabian Peninsula. On the other hand, many of the oil production and storage facilities in and around Iran are affected by the attacks by the warring parties. As a result, the supply of oil on the world market is falling drastically.

High energy prices affect the population in many ways. They affect heating, electricity and fuel costs and can even be reflected in wages and unemployment due to their negative impact on the economy.

The price increase is particularly noticeable in low-income households. According to the Federal Statistical Office, almost four million people were able to do so by 2025 - before the renewed price jumpsPayment demandstheir utilities do not comply.

Almost four million people can no longer afford electricity and gas

What's next?

Anyone who wants to make a forecast regarding the price of oil and gas will be confronted with the fact that the prices depend heavily on the global political situation. A ceasefire between the USA and Israel and Iran could stabilize oil and gas prices in the long term, but an expansion of the conflict or another war could also increase prices further.

However, there is no end in sight to the wars responsible for the price increases. With regard to gas prices, it is more than questionable to what extent Germany's trade relations with Russia can be restarted after the end of the war in Ukraine.

Even an end to the attack on Iran would not ensure that oil prices would fall to pre-war levels. On the one hand, large parts of the infrastructure for oil and gas production in Iran and the surrounding area have been destroyed, which means that production would not be possible again at full capacity immediately. Become anotherPrice reliefon the world market is often not completely passed on to the end consumer. This allows utilities to quietly increase their profit margins to levels above those before the price increase.

However, energy prices are not only at risk of stagnating, but could also rise massively again this winter. The reason for this can be found inlow filling levelthe German gas storage facilities. With a filling level of around 53 percent, these are at a historic low. A cold winter with a correspondingly high energy requirement could cause the storage level to fall further or even become empty. Although this does not appear to be an acute threat to private individuals' energy supplies, empty storage facilities could have a serious impact on the economy and cause a further explosion in energy prices.

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What is politics doing?

In Germany, the procurement of oil and gas is not regulated directly by the state; instead, it is in the hands of utility companies that speculate on making profits from the supplies necessary for the population. The low filling level of the German gas storage facilities can be explained by the fact that the supply companies had speculated that they would be able to buy cheap oil and gas again after the end of the Iran war.

With regard to gas storage, the effort is being madeFederal Governmentabout downplaying the situation. Federal Economics Minister Katherina Reiche (CDU) announced that there was no reason to worry since Germany also has operating LNG terminals in addition to the storage facilities. Chancellor Friedrich Merz (CDU) also calls for calm and emphasizes that Reiche is again “doing exactly the right thing to ensure the gas supply in winter”. However, he does not comment on what specific actions “the right thing” includes. There is an exchange with the operators.

In addition to the seriousness of the situation, such statements fail to recognize that it is not just a total failure of the energy supply that would endanger the population. The price increases themselves are also a burden. Many residents are feeling the cost increase in their budget. If they can no longer afford the car ride to work or the heating costs of their apartment, a high oil price can also endanger their existence.

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Fuel discount as a remedy?

The last concrete measure the government adopted was a fuel discount. It should make refueling more affordable again. Consumers should save 17 cents per liter of petrol or diesel through tax cuts.

However, this initiative also received massive criticism. While drivers and businesses initially benefit from the discount, it is paid for by all citizens' taxes. The energy costs of people who don't or rarely drive cars remain as high as usual, while their tax burden could increase as a result.

There are also fears that the fuel discount will not be fully passed on to consumers. It is common for such discounts to be used by oil companies to raise fuel prices irregularly, so that only parts of the fuel discount reach consumers, while the federal budget has to cover the entire cost.

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