March oil prices jump to impact consumers in Germany for years to come -think tank

"It is conceivable that the effect will be limited because other oil suppliers would still be in competition without Russia," Rieth was quoted by Handelsblatt as saying on Wednesday.

The rise in oil prices by around 20% in March in Germany will take a toll on consumers in Europe's biggest economy for more than two years to come, a study by the German Institute for Economic Research (DIW) showed on Wednesday. German annual inflation rose to its highest level in more than 40 years in March, jumping by 7.3% on the year, as prices of natural gas and oil products soared following Russia's invasion of Ukraine.

The jump will keep consumer prices 1.5% higher for more than two years even if oil prices fall again, the study, published first by Handelsblatt newspaper, showed. Other effects of the war such as sanctions and general economic developments in the wake of the pandemic were not taken into account, the study added.

But it was questionable whether an oil embargo imposed on Russia would have a strong inflationary effect, Malte Rieth, the study co-author, told the newspaper. "It is conceivable that the effect will be limited because other oil suppliers would still be in competition without Russia," Rieth was quoted by Handelsblatt as saying on Wednesday.