Expected pricedrop for refined products
A pricefall in June for crude oil and natural gas gave a steep decline in the prices for refined petroleum products in July. The prices for electricity got an upturn after five months of falling, and thus had a dampening effect on the producer price index (PPI) in July.
PPI had a downturn of 1,2 per cent in July. The combined index of crude oil and natural gas fell by 3,0 per cent in July. Unlike June, they did not pull in the same direction. The price on crude oil had a smaller uptick, while the gas price continued to fall. This difference contributed strongly to different price movement at the domestic and at the export market. Crude oil was a contributor in pulling prices of oil and gas up at the domestic market, while natural gas was responsible for lower prices within the combined group at the export market.
Downturn in the industry
June’s drop in prices on crude oil and natural gas had a negative effect on refined products. This is in line with a known pattern in which change in the prices for the raw materials in one month, gives a change in prices for the refined products in the next. The drop in prices for refined products was joined by a reduction in prices in some other industry sectors, like chemical industries and the metal industries. That led to the total index for the industries falling 1,1 per cent in July.
Figure 1. Price indices. 2015=100
|Refined petroleum products||PPI total|
Electricity and mineral products up
The two industries with the largest positive contribution, was electricity and the mineral product industry. For the electricity, this was the first price increase in half a year. Both industries have their largest contributions on the domestic market. This, together with the aforementioned discrepancy between oil and gas, made the total PPI for the domestic market go up 0,7 per cent, while it for export prices fell by 3,1 per cent.