Record high electricity price growth in Norway pushes up the consumer price index

ElectricityPhoto: Jonathan Hanna / Unsplash

The consumer price index (CPI) has risen 4.1% from September 2020 to September this year. The more than doubled electricity price is cited as the reason. From September 2020 to September 2021, the prices of electricity including grid rent rose by 107.7%, Statistics Norway (SSB) writes.

“This is the largest twelve-month change measured for this group in the CPI since the measurements started,” the SSB noted on Monday.

It added that this must be seen in connection with the fact that the price level for electricity was low through large parts of the previous year. The reasons for the high price level for electricity are, among other things, dry weather in Southern Norway, low inflow, and low reservoir filling.

“European conditions, such as high fuel and quota prices as well as gas prices in Europe, also affected Norwegian electricity prices,” the SSB explained.

Increase also without electricity

September 2021 is the first month since March 2020 that the corona pandemic has not led to special treatment of certain services in the calculation of the CPI. This means that real prices for flights abroad are also included from and including September 2021, according to the SSB.

Core inflation, the CPI-ATE, has risen by 1.2% in the last twelve months. The consumer price index excluding electricity, the CPI-JEL, rose 1.2% from September 2020 to September 2021.

This means that electricity, including grid rent, contributed to raising the CPI by as much as 2.9% during the period.

Lower price of food

The increase in the CPI over the last twelve months was dampened by price developments for food and non-alcoholic beverages. For this group, a price decline of 3.8% was measured from September last year to September this year.

Passenger transport by air, which is based on both real and estimated prices during the measurement period, also showed a decline in the last twelve months. From August to September, the consumer price index rose 1.0%, while core inflation rose 0.4% in the same period.

Producer prices also up

The producer price index also rose sharply in September. Energy products, in particular, drove the increase, according to the SSB. In terms of the extraction of crude oil and natural gas, which rose by around 19%, it was especially natural gas that affected the rise the most.

“The price of natural gas fluctuates somewhat in the short term, but the price has overall pointed upwards in the last five months. Increased demand for gas in Europe in combination with lower supply is an important explanation for the high gas prices,” the SSB wrote.

For power supply, prices increased by 17.9% from August to September, leaving them almost 126% above last year’s September level.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

Do you have a news tip for Norway Today? We want to hear it. Get in touch at [email protected]

Be the first to comment on "Record high electricity price growth in Norway pushes up the consumer price index"

Leave a comment

Your email address will not be published.