Petrol prices back on decline while rent rise per quarter highest in 11 years

While petrol prices seem to be back on the rise, the price at the pump in the final week of June was lower than the June quarter average, Stats NZ said today. 

Petrol prices back on the decline after a slow rise, according to Stats NZ Source: 1 NEWS

Higher petrol prices in this quarter of 2019 lead to an inflation of 0.6 per cent, however petrol prices have started to drop again.

“Petrol prices rose slowly over the first part of the quarter, reaching a peak in late May and then falling,” Stats NZ's prices senior manager Paul Pascoe said.

“By the last week of June, the petrol pump price was 2.0 percent lower than the June quarter average.”

In the year to June 2019, the inflation rate was 1.7 per cent, up from 1.5 per cent in the March 2019 year, which can be attributed to petrol prices rising 5.8 per cent in the June 2019 quarter after a 7.0 per cent fall in the March 2019 quarter.

The average price of 91 octane petrol was $2.13 a litre this quarter, up from $2.01 last quarter, but still under its peak of $2.18 in the September 2018 quarter, according to Stats NZ. 

Petrol prices has been one of the largest contributors to inflation this quarter of the year, as many other transport items fell in price and offset this rise such as second-hand cars, domestic flights and rental cars. 

Second-hand car prices fell 3.9 per cent this quarter, that being the lowest since December 2015 quarter. Domestic air fares have been steadily falling since 2015, with this quarter's air fares the cheapest since the December 2010 quarter. 

Despite good news of petrol prices dropping once again, the inflation increased due to another key factor - housing.

Rent prices have increased at a rapid rate in this quarter, at 1.0 per cent it's the largest quarterly rise in 11 years since the March 2008 quarter.

Reserve Bank of New Zealand says the inflation increase in this quarter due to higher rents and petrol prices are market expectations, and what was expected.