Petrol pushes annual inflation to 1.9 percent
16 October 2018
The consumers price index (CPI) increased 1.9 percent in the September 2018 year, driven by higher petrol prices, Stats NZ said today.
This follows a 1.5 percent annual inflation rate for the June 2018 year. For the September 2018 quarter, the inflation rate was 0.9 percent.
“Petrol prices increased 19 percent in the September 2018 year,” prices senior manager Paul Pascoe said. “This is the highest annual increase since June 2011.”
Petrol rose 5.5 percent in the September 2018 quarter. The average price of 91 octane, after discounts (for the whole of the September quarter), reached $2.18, up from $2.06 in the June quarter. The price of petrol rose continually throughout the quarter, and by the last week of September was 3.2 percent above the September quarter average pump price.
Multiple factors contributed to the petrol price increase this quarter. The exchange rate fell over the quarter, while crude oil prices rose. In addition, a regional fuel tax of 10 cents per litre plus GST was introduced in Auckland on 1 July.
Note: Dubai crude oil data presented in the graph above sourced from the Ministry of Business, Innovation and Employment’s Weekly fuel price monitoring.
Petrol prices increased 8.8 percent in Auckland over the quarter, compared with 3 to 5 percent across the rest of the country.
"While petrol only makes up about 4 percent of the CPI, it can have a large impact on overall inflation," Mr Pascoe said. "It contributed about 30 percent to the quarterly CPI movement for September, and about 40 percent to the annual movement."
This is the first time petrol prices have risen for four consecutive quarters since September 2008, during the global financial crisis.
When petrol is removed from the CPI, the increase was 0.7 percent for the September 2018 quarter (compared with 0.9 percent overall), and 1.2 percent for the September 2018 year (compared with 1.9 percent overall).
A 3.5 cents per litre nationwide increase in petrol tax was introduced on 30 September. The effects of this price increase will be seen in the December 2018 quarter.
The falling exchange rate, which makes imports more expensive for New Zealanders, also contributed to a 2.6 percent rise in the price of audio-visual equipment such as televisions, cameras, and home theatre systems in the September 2018 quarter. This is the first quarterly rise for audio-visual equipment since September 2016, as quality adjustments generally cause price falls for these goods.
View our Consumers price index: September 2018 quarter video.
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