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COST OF LIVING

Petrol to top CHF2 per litre in several Swiss cantons

Petrol prices in Switzerland are set to rise to heights not seen for well over a decade, with fuel to cost more than CHF2 per litre in some cantons.

Petrol costs are set to rise in Switzerland. Photo by Erik mclean from Unsplash
Petrol and diesel prices in Austria have hit a record high. Photo by Erik Mclean from Unsplash

On Monday, oil barrels crossed the $92 mark, which will soon result in higher costs at the pump for drivers. Experts expect the prices to continue to rise, with a $100 barrel of oil not out of the question. 

Touring Club Switzerland, the country’s motor authority, registers a current average of CHF1.87 for petrol and CHF1.91 for diesel fuel. 

However, due to rising crude oil costs as well as a variety of other factors, fuel costs are expected to top the 2008 highs of CHF1.99 for petrol and CHF2.27 for diesel. 

EXPLAINED: How does roadside assistance work in Switzerland?

Worldwide increases in inflation, the impact of the Covid pandemic, a slowdown in American oil production and geopolitical tensions have all contributed to the rise in prices. 

OPEC has agreed to increase production, however this is not expected to satisfy these concerns. 

There is likely to be little respite for cross-border workers or shoppers however, with Swiss fuel prices tending to be lower than those in the surrounding countries. 

This is primarily due to lower tax on fuel sold in Switzerland.

Can you save money on petrol in Switzerland, and if so, how?

Petrol distributors and stations compete with each other, which is good news for consumers.

RTS public broadcaster analysed petrol prices at various stations in several regions and found lowest prices at Rasthof Platenenhof station in Gampelen (BE).

READ MORE: Where in Switzerland can you find the cheapest fuel?

Another cheap fuelling option is a few kilometres away, at the Pit-Stop de Boudevilliers in Val-de-Ruz in canton Neuchâtel.

In fact, RTS reported that this whole region benefits from cheaper gasoline due to its proximity to the Cressier-Cornaux refinery and large volume of purchases.

Another low-cost location is in Samnaun, canton Graubünden in the region of Engiadina Bassa / Val Müstair.

The price there is 30 percent cheaper than on the notoriously expensive Lake Geneva region.

The reason for this price disparity is that this community of just over 700 inhabitants is a historic fiscal enclave that does not apply VAT or other taxes.

Other options include EK Automobile in Kestenholz, Solothurn and Tankstelle Fiechter in Teufenthal, Aargau.

But what if you don’t live in these areas?

You can still save some money on petrol if you do your research and know where the best (meaning: cheapest) places are to fuel up in your region.

Here are some tips:

Autoclub memberships often offer discounts on petrol. ACS members and TCS members can save between two and five cents per litre. 

Larger petrol retailers will also often have discount deals, while Swiss supermarkets also offer deals with particular gas station chains. 

Prices are usually the highest on (or close to) motorways, in or near large cities, and at branded chain stations. You can find better deals at smaller, independent stations away from main roads.

However, you should avoid going too far out of your way to save on fuel.  

“A one-cent difference on the price of the litre justifies a detour of  two to three kilometers, at most. Otherwise, the excess consumption drowns the economy on a 50-litre tank”, said TCS’s Erich Schwizer.

One useful website listing cheaper petrol options throughout Switzerland is this.

READ MORE: How can you save on your household energy bills in Switzerland

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For members

PENSIONS

How will Switzerland’s plan to hike VAT affect you?

Since Swiss voters approved a move to pay an extra month’s state pension to retirees, the government has looked into various ways to finance the "13th pension payment" without penalising those who are still employed — in other words, not burdening the current workforce with higher social contributions.

How will Switzerland's plan to hike VAT affect you?

After the vote in March 2024, the Federal Council set out to find the best way to cover the additional pension payout, without putting this financial responsibility on the active workforce.

In August, the government decided to foot the bill for the 13th pension payment by increasing the Value-Added Tax (VAT) — the flat-rate tax that is added to the cost of items you purchase.

The amount of the increase, however, was under discussion.

This week, minister Elisabeth Baume-Schneider, who is responsible for social insurance and compensation scheme, announced the VAT hike is set at 0.7 percent, which means the consumption tax will go up from the current rate of 8.1 to 8.8 percent.

She pointed out that this mode of financing is more equitable, because it means everyone will contribute to boosting the pension coffers, including the retirees themselves.

With this move, the government will collect 450 million francs to bankroll the cost of the 13th pension when it goes into effect in January 2026. 

How will higher VAT impact you?

You may think that higher VAT will have a negative impact on your finances — as this means the already high cost of living will go up even further.

Keep in mind though, that you will benefit once you retire and will receive the 13th instalment too.

And if you decide to leave Switzerland, your pension contributions go with you — a simple procedure if you are a citizen of EU /EFTA, and slightly more complicated (but doable nevertheless) if you go back to a third nation.

How much more are you likely to pay?

VAT is the extra charge added to the cost of most purchases, from food and drink to clothing.

But how much more expensive will products and services become with the 0.7-percent hike?

In August, while the Federal Council was still crunching numbers regarding the VAT increase, Frank Marty, a tax expert at the business umbrella organisation Economiesuisse, calculated price increases based on a raise of 0.5 percent. 

He concluded that “in an average household [which in Switzerland means an income of just over 80,000 francs a year], additional 0.5 percent will result in 250 francs going to VAT per year.”

If your salary exceeds the median wage, then you will likely contribute 450 francs a year, but only 200 francs if you are low-wage earner (and therefore a lower spender).

With 0.7 percent, these amounts will be slightly higher.
 

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