Consumers warned to brace for further price hikes

Even though inflation has begun to ease the cost-of-living crisis isn't over just yet unfortunately. 

Our analysis shows that petrol, diesel, alcohol, streaming services, and transport services are all going up in price over the coming weeks, which will put further pressure on hard-pressed households.   

Meanwhile gas and electricity prices look set to remain near record highs for the foreseeable future with only a small drop in prices likely over the coming months while there are renewed concerns over food prices.

Here we take a look at what price hikes consumers can expect.  

Motorists 

Motorists will have to contend with the restoration of excise duty on petrol and diesel in September and October which will add 15 cent to a litre of petrol and 11 cent to a litre of diesel. 

There will also be a €7.50 increase in the carbon tax in the October Budget which will add around another 2 cent to a litre of petrol and diesel.

Both measures will add around €150 to €200 a year to the average driver’s fuel costs.

Heating

The carbon tax increase will also add around €17 to the average annual gas bill and around €19 to the fill of a 900-litre oil tank. 

This means households will soon be paying around €130 in total in carbon tax on their gas costs and around €142 in total for their oil. 

The implementation of the carbon tax increase on home heating fuels may be spared until next May though. 

Drink 

Diageo has announced another four cent increase in the price of its famous pint as well as its other brands like Carlsberg and Smithwick’s. This comes on the back of a 12 cent hike in February.    

Food 

According to the Central Statistics Office (CSO) food inflation is still running at over 10% a year having hit a high of over 13% a few months ago. Prices are still rising month on month - just at a lower rate. 

However, Russia's recent decision not to extend the Ukraine grain deal, which allowed for the safe export of grains from the country, has stoked worries about global food supply chains and prices once again.

Prices for grains and oilseeds have already risen in response to the news that Russia will suspend its participation in the deal. And this will likely lead to higher prices for staple items such as bread, cereals and pasta over the coming months.

Transport 

Although bus and rail fares have largely come down over the past year on the back of Government intervention, it isn’t all good news. 

From 31 July Bus Eireann will hike the price of its Expressway coach services by 5%. 

Streaming/communications 

Spotify has announced that it’s hiking the cost of its individual and duo plans by €1 a month to €10.99 and €14.99 respectively. And Disney+ is hiking its price by €2 a month to €10.99 from November. 

Meanwhile Netflix is clamping down on password sharing meaning many will have to fork out for their own subscription for the first time, which start from €8.99 a month. 

This means some music and movie lovers may need to fork out an extra €144 a year.

Air fares 

The recent bad weather means many are probably thinking of booking a last-minute getaway.

But airfares are up over 34% compared to last year according to the CSO and it appears the era of ultra-cheap travel is over - for good potentially. 

The inability (and in some cases refusal) of airlines to add capacity post Covid means many are still operating a reduced service.

The Ukraine war has also closed parts of airspace in Europe, leading to overcrowding on certain routes and a consequent reduction in capacity by airlines.

Lingering supply chain issues also mean that the manufacture and delivery of new aircraft has been curtailed. 

All this, coupled with high demand as consumers prioritise experiences and travel over material things, has put huge upward pressure on air fares. 

Hospitality 

From 31st August the reduced 9% rate of VAT rate for the hospitality sector will expire and return to 13.5%. Although associated with hotels, the rate applied to a whole host of services.

As a result, everything from a coffee, cinema ticket, haircut, restaurant meal or hotel room could all go up in price if businesses choose to pass on the VAT increase.

Health insurance

Health insurance premiums also look set to get drastically more expensive over the coming weeks.

VHI, the country's largest health insurer, is hiking its prices by an average of 7% from 1st October, coming on the back of a 4.8% rise in March. The cost of a typical family plan will now be around €400 more expensive due to the two price hikes.

And Laya (recently bought by Axa) is upping its prices by an average of 3% from October too. 

Why are prices rising if inflation is falling?

Although the general rate of inflation is expected to fall over the coming months this doesn’t mean prices will necessarily drop. It just means prices are increasing at a slower pace. This is a key point a lot of people don't get. Unless we see outright deflation, things aren’t getting any cheaper. 

To reiterate this point, although the overall rate of inflation fell to 6.1% in June from 6.6% in May according to the CSO, prices still rose a hefty 0.8% over the month. 

And food inflation inched up another 0.1%, leaving food prices even higher than ever. 

And all forecasts are for prices to continue to increase over the next year or so in most sectors. So really the cost-of-living squeeze isn’t going to get much better.

Petrol, diesel, alcohol, airfares, and streaming services are all going up in price over the coming weeks, while there will be upward pressure on food prices again following Russia’s decision not to extend the Ukraine grain deal.

What’s more, gas and electricity prices remain at record highs. We’ve seen no price drops from any of the main suppliers this year. While it's expected we'll see some small decreases before the end of the year, it'll still leave our prices way, way above normal and unmanageable for some people.

And we’re still not sure what energy supports, if any, the Government will provide this year.

Save money with bonkers.ie

If you're looking to try beat the price hikes and put some money back into your pocket, bonkers.ie has got you covered!

• Here are 16 ways to use less electricity and save money.
• Here are some simple ways to cut down on your food costs.
• SIM-only plans are a great way to reduce your mobile costs. Here are five of the best deals right now. 
• Running a car these days isn't cheap. So check out these 13 ways to lower your driving costs.

And of course we can help you switch supplier and save money across your energy, broadband, banking, and car and home insurance bills.