BERLIN, Oct. 21 (Xinhua) -- On a crisp October evening in Berlin, Manuela, a middle-class resident, leaves her living-room heating firmly off. In years past, a flick of the switch would have sufficed at the first hint of a chill; today, she reaches for a sweater instead.
"Before turning on the heating, we have to think twice and ask ourselves whether it is really necessary at this temperature," she said.
The family's annual outlay on power, heat and hot water runs to about 3,500 euros (3,920 U.S. dollars) -- a monthly burden of nearly 300 euros. As fuel, food and other essentials grow dearer, they have been compelled to rethink their household budget.
According to the Household Energy Price Index for European Capitals, residential natural gas prices in Berlin rose by about 22 percent between February and September 2026. For Manuela, the concern is that annual heating bills could mean unexpected additional costs, as payments are made in monthly installments and adjusted later.
Her prudence echoes a wider anxiety across Germany. According to "The Fears of Germans in 2026," a survey by insurer R+V, 59 percent of respondents cited a sharp rise in the cost of living as a primary concern.
Isabelle Borucki, a political scientist at Philipps University of Marburg, said rising prices for essentials such as energy, housing and food were squeezing household budgets for leisure, holidays and other spending.
Official data point to renewed inflationary pressure. According to Germany's Federal Statistical Office, the annual inflation rate rose to 3.3 percent in September, its highest level since December 2023. Energy prices increased 14.9 percent year on year, with motor fuels up 37.1 percent and heating oil up 74.9 percent.
As households cut back on discretionary spending, the effects can spread to retail, hospitality and tourism, weighing on domestic demand.
Cost-of-living concerns have also fueled protests elsewhere in Europe in recent days, notably in France, Italy and Portugal. The demonstrations, driven by concerns over rising prices, public services and austerity, reflect broader anxieties about purchasing power and living standards.
The economic implications are particularly significant in Germany, where manufacturing and exports face mounting pressure. Energy-intensive industries such as chemicals are directly exposed to high gas and electricity costs, while other manufacturers face rising transport and raw material expenses. Companies unable to pass on these costs may see profits shrink, curbing investment and job creation.
Volker Treier, chief analyst at the German Chambers of Industry and Commerce, has warned that high oil and gas prices could increase Germany's energy import bill by as much as 40 billion euros (44.8 billion dollars), equivalent to nearly 1 percent of the country's gross domestic product.
The pressures on Germany's industrial base are evident in the chemical sector. According to German industry publication KunststoffWeb, LEUNA-Polyamid, a producer of plastics for the automotive and electronics industries at the Leuna chemical complex in Saxony-Anhalt, is gradually shutting down production after failing to find an investor. The company reported an 80 percent increase in combined energy and raw material costs since filing for insolvency in June. Around 400 jobs are at risk.
Germany's energy-cost pressures are unfolding amid a major transformation of Europe's energy supply. Following the outbreak of the Russia-Ukraine conflict, Germany reduced its reliance on Russian energy, while European countries increased imports of liquefied natural gas. Escalating tensions in the Middle East have added uncertainty to global energy markets.
For Germany, the task is to balance energy security, affordability and industrial competitiveness. Diversifying supplies and investing in cleaner energy can reduce exposure to fossil-fuel price shocks, but households and businesses must also cope with near-term costs. If energy prices remain high, companies may delay investment or cut production, while households may further reduce discretionary spending.
The pinch is already being felt in Manuela's home. During Germany's autumn school break, the family would customarily take their children abroad; this year, they have opted to stay put and squirrel away the savings for more pressing needs. ■
