Inflation in Germany hit 7.9 per cent in May, the highest level since the first oil crisis in 1973/74, according to preliminary figures published by the country's Federal Statistical Office (Destatis).
Amidst wheat shortages and fears of a global food crisis, food prices increased by 11.1 per cent, while energy prices soared by 38.3 year-on-year, Xinhua news agency quoted Destatis as saying.
The spike in energy prices has been caused by the Russia-Ukraine war, and has had a "considerable impact on the high inflation rate", the Office said.
Meanwhile, supply chain interruptions caused by the Covid-19 pandemic have also pushed up inflation.
Germany's import prices in April were up 31.7 per cent year-on-year, according to Destatis. With a plus of more than 300 per cent, natural gas had the biggest influence on energy prices, followed by crude oil with prices up 77.5 per cent year-on-year.
In order to cushion rising energy prices, fuel tax in Germany will be temporarily lowered, and citizens will receive a one-off energy allowance of 300 euros ($323).
To support the switch from cars to buses and trains, a cheap public transport ticket will also be made available during the summer, for just 9 euros per month.
The German government expects an annual inflation rate of 6.1 per cent for 2022, a "figure otherwise seen only in exceptional cases, such as during the oil crisis".
However, it said inflation is set to drop again next year.
Consumer sentiment in Germany remains at an all-time low, according to market research institute GfK.
Despite further easing of Covid-19 restrictions, the Russia-Ukraine war and high inflation are "weighing heavily on consumer sentiment", it added.