Khaberni - Fuel prices jumped significantly immediately with the commencement of military strikes by the United States and Israel against Iran. Despite the relief that prevailed immediately after the ceasefire announcement for two weeks, estimates warned of a continued increase in food costs, holidays, and even clothing amidst fears of starting a series of economic damages and a state of uncertainty about the future.
This means that your expenses are likely to rise in the coming months. Here are the most important things you need to know.
Holidays
According to a BBC report, European countries usually obtain about half of their jet fuel from the Gulf. Concerns over supply shortages led to a sharp rise in prices, with the price per ton reaching its highest ever level at $1,838, while the pre-war price per ton was $831.
This significant increase has led airlines in Asia and around the world to cancel flights and raise ticket prices.
For example, cancellations by "Air New Zealand" are expected to include flights to and from Auckland, Wellington, and Christchurch, while "Delta" will target overnight and midweek flights, and "Air France-KLM" will increase the prices of long-haul flights.
Other companies like "IAG" (International Airlines Group), which owns British Airways, have been able to delay changes so far because they purchase fuel at fixed prices determined before the war.
Passengers are also being warned of the possibility of further ticket price increases and flight cancellations.
Additionally, the large turnout at destinations considered safe, such as Portugal and the Caribbean, may lead to increased ticket prices to those places.
Energy Bills
Oil and gas prices have significantly increased worldwide, and residents in Britain who rely on heating oil are already facing an increase in costs. Most homes in Britain are protected by a price cap set by the energy regulator, but this cap is expected to be significantly raised during its review in July, meaning higher bills despite lower energy consumption in the summer months.
Estimates by "Cornwall Insight" expect the annual gas and electricity bill for households in Britain to rise by about 18%, compared to the April price cap.
The British government has promised to offer financial aid based on family income if there is a significant increase in bills, but these aids may be delayed until autumn.
Fuel Costs
Fuel stations are usually the first place where the effects of rising fuel prices are seen. This was the case in Britain, where diesel and petrol prices in March were the highest in three years.
Governments around the world are taking measures to mitigate the impact of rising prices on consumers and the economy, such as limiting fuel quantities or encouraging people to work from home.
The "Royal Automobile Club" in Britain says there is great uncertainty regarding fuel price expectations, stating the best vehicle owners and drivers can hope for is that fuel prices stop increasing at the current rate. They should not expect significantly cheaper fuel in the short term.
Food and Groceries
Increased fuel prices lead to higher food product prices due to increased transportation costs. Diesel is used to operate some agricultural machinery, while farmers use energy to heat greenhouses.
Fertilizer prices saw a rise, due to disruptions in transport lines of essential materials used in their manufacture. According to data from Andersons Centre consultancy, operating costs for farms have increased by 7% compared to last March.
The effects of these additional costs are expected to be reflected in store prices. UK food industry experts predict that prices may increase by about 9% by the end of this year, three times pre-war expectations.
Clothing
Most clothes in the United Kingdom are manufactured abroad, mainly in Asian countries like China and Bangladesh.
Major manufacturers in Bangladesh, Vietnam, and the Philippines are facing a sharp rise in energy prices, and the increase in oil prices is also driving up transportation costs. Prices for polyester fibers, which are made from oil derivatives, have risen by about 25% compared to before the war began.
The British clothing retailer "Next" expects additional costs of about £15 million ($19.1 million) if the war continues for three months, indicating that consumers will face higher product prices if costs increase, a sentiment echoed by "Mountain Warehouse" which stated it would do the same if conditions persist.
Medicines
Petrochemical by-products are used in the production of medicines such as pain relievers, antibiotics, and vaccines.
The United Kingdom imports most of its medicines, with 30% coming from India, which largely depends on imported oil from the Gulf region.
The UK was already facing a shortage in some pharmaceutical products before the war, and senior officials from the National Health Service and pharmacy sector have expressed concerns about supplies and prices.
The "National Pharmacy Association" stated that the war had increased the cost of transporting and manufacturing some medicines. Some pharmacies have raised prices for some commonly sold over-the-counter drugs, such as paracetamol and some types of fever medicine, by about a fifth. It also mentioned that some wholesale prices have nearly doubled since the war began.
Borrowing
Typically, the Bank of England raises interest rates when prices jump significantly, in an attempt to curb demand. If prices rise, borrowing money through credit cards or mortgages becomes likely more costly.
This means that lending options may decrease with an increase in costs, but it also means that savers might get a slightly better return on their savings accounts.
