Producer price index, 15 March 2011

PPI increased by 2.5 per cent from February to March. Extraction of oil and natural gas as well as refined petroleum products played the largest role in bringing PPI up in March.

Prices in extraction of oil and natural gas rose by 3.9 per cent, entirely due to the higher oil price. The price of crude oil (Brent Blend) measured in US Dollars increased as much as 9.9 per cent in March compared to February. However, inflation was dampened by the higher price of the Norwegian Krone (NOK) against the US Dollar. Measured in NOK, the price of crude oil increased by 7.3 per cent in this period.

Meanwhile, the prices of natural gas sold to European customers were reduced. Similarly, the currency effect exacerbated price declines for natural gas.

Prices in refined petroleum products rose by 9.9 per cent from February to March, mainly because of

higher export prices.

Price rises of 1.8 per cent in manufacturing

In addition to refined petroleum products, several other industries experienced substantial growth from February to March. Prices in chemical and pharmaceutical products rose by 1.8 per cent, mainly due to an increase in the prices of basic chemicals. Among the possible causes of the price increase may be higher energy prices, since energy consumption in this industry is very high.

Prices in paper and paper products, as well as non-metallic mineral products rose in March. Price increases in these industries are applicable for the domestic market and were 7.6 and 3.7 per cent respectively.

Price drop in electricity and metals

Lower prices in electricity and basic metals contributed to dampening the price rise in PPI. Electricity prices fell by 2.3 per cent from February to March. Reduced power consumption in Norway and the other Nordic countries caused by milder weather, as well as increased wind power in Denmark have contributed to the fall in electricity prices in March.

Prices in basic metals decreased by 1.4 per cent in March. Lower prices of iron and steel, as well as non-ferrous metals were the reasons for this price decrease. Week 11 in March, in particular, was distinguished by a sharp fall in metal prices, as production in the Japanese car industry was temporarily halted due to the earthquake on 11 March. Metal prices rose towards the end of the month as the production was restarted.

Twelve-month growth: prices up 21.4 per cent

PPI increased by 21.4 per cent from March 2010 to March 2011. All industries, except textiles, wearing apparel and leather industry, experienced inflation in this period. The most important contribution to the twelve-month growth came from extraction of oil and natural gas.

Within manufacturing, refined petroleum products, basic metals, food industry, chemical and pharmaceutical products contributed the most.