Real fuel prices in Germany as of 2025

The Story

Today I came across several plots showing the development of real fuel prices in Germany since 1970, generated with the help of AI. At first glance, some of the price spikes appeared unusually high and did not seem fully consistent with a long-term economic perspective.

To verify this, I decided to reconstruct inflation-adjusted fuel prices myself. For this purpose, I used two data sources: the annual inflation rates provided by Destatis and historical fuel price data from ADAC dating back to 1950. By combining these datasets, I recalculated all historical fuel prices to a common reference level—namely the price level at the end of 2025.

The basic idea behind this adjustment is to account for the loss of purchasing power over time. A price from the past is not directly comparable to today’s prices unless it is corrected for inflation. The adjustment can be done step by step using annual inflation rates or through a cumulative inflation factor.

Mathematically, the adjustment works as follows:
For a given price in year t, the inflation-adjusted price in 2025 is calculated by multiplying the original price by the cumulative inflation factor from year t to 2025.

In practice, this means that each year’s price is successively increased by the corresponding inflation rate until it reaches the 2025 price level. Alternatively, a precomputed inflation index (such as a price index) can be used, where the ratio between the index in 2025 and the index in year t gives the same result.

The resulting plot (see below) shows the fuel prices normalized to 2025, providing a more realistic comparison across decades. This approach smooths out apparent distortions and reveals the true long-term trends in fuel prices, independent of inflation effects.

Overall, the recalculation demonstrates how important it is to adjust for inflation when analyzing historical price data, especially when visualizations may otherwise exaggerate past price fluctuations.

Citation

If you cite this post, please use:

@online{holthaus_20260407_gasoline,
  title   = {Real fuel prices in Germany as of 2025},
  author  = {Holthaus, Tim},
  year    = {2026},
  month   = {04},
  day     = {07},
  url     = {https://me.timholthaus.com/posts/stories/20260407_gasoline/}
}