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Petrol pushes annual inflation to 1.9 per cent

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The consumers price index increased 1.9 per cent in the September 2018 year, driven by higher petrol prices, Stats NZ says.

This follows a 1.5 per cent annual inflation rate for the June 2018 year. For the September 2018 quarter, the inflation rate was 0.9 per cent.


“Petrol prices increased 19 per cent in the September 2018 year,” says prices senior manager Paul Pascoe.

“This is the highest annual increase since June 2011.”

Petrol rose 5.5 per cent 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.

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Petrol prices increased 8.8 per cent in Auckland over the quarter, compared with 3 to 5 per cent across the rest of the country.

"While petrol only makes up about 4 per cent of the CPI, it can have a large impact on overall inflation.

"It contributed about 30 per cent 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 per cent 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 per cent 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.

 


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