Producer price index, 15 April 2010

Prices in extraction of oil and natural gas increased by 7.9 per cent from March to April and played the largest role in the overall rise in producer prices of 3.5 per cent last month. The average price of crude oil (Brent Blend) has increased further through April, and the price of Norwegian natural gas to the main trading partners rose in the same period.

The price increase in metals from March to April was the second largest reason for the rise in the overall producer price index. Average prices of non-ferrous metals from the London Metal Exchange increased last month, but inflation was lower in April than in the previous month. Strong price rises in the first half of April pulled the average up, while the significant fall in prices towards the end of April, caused by the crisis in Greece, has dampened the average. Despite the weaker inflation in the metal prices in April, the overall index for the basic metals industry increased more from March to April than from February to March (from 3.2 per cent in March to 6.0 per cent in April). This can be largely explained by the fact that Norwegian industry of basic metals has a time lag reaction to the changes in the metal prices.

Prices of petroleum and coal products increased by 3.0 per cent in April and were driven by higher prices for jet fuel, gasoil and gasoline in export and domestic markets.

Decline in prices in the domestic market

The producer prices in the domestic market fell by 0.3 per cent in April. The price decreases were caused by lower prices in electricity, chemical and pharmaceutical industries, as well as food industry, and fell by 8.6, 5.1 and 0.2 per cent respectively.

Inflation over the last twelve months

The producer price index rose by 26.7 per cent from April 2009 to April 2010. The rise in the twelve-month rate was strongly influenced by higher prices in the export market and higher prices in the extraction of oil and natural gas, as well as basic metals and petroleum and coal product industries. Prices in crude oil, gas, petroleum products and metals have increased considerably since the winter of 2009, when they were at a historically low level.

All industries, except chemical and pharmaceutical industries, as well as furniture and other industries, have contributed to the rise in the twelve-month rate in the domestic market.

For information on the commodity price index for the industrial sectors, see http://www.ssb.no/vppi_en