Producer price index, 15 February 2012

The PPI increased 1 per cent from January to February. Among the industries that contributed to the month’s change were electricity, refined petroleum products and chemical and pharmaceutical products. In February, producer prices were affected by lower prices in the export market. A strengthened Norwegian krone has resulted in lower export prices (measured in NOK) in several export commodities where prices are typically formed on the international markets.

Price increases in electricity

Electricity prices rose 17.1 per cent from January to February. Both the strong jump in the system price from Nord Pool and higher electricity rates to Norwegian households contributed to the growth. The rise in system prices was particularly noticeable in the first and second weeks in February. High Norwegian consumption as a result of cold weather and reduced nuclear power production in Sweden were the main reasons for the high electricity prices in the first week of February. Electricity prices increased further in the second week in February as a result of lower inflow to water reservoirs than normal and higher demand for Nordic electricity in continental Europe. As a result, the prices in the second week were about 35 per cent higher than the average for February.

Prices in refined petroleum products increased 1.7 per cent from January to February due to high oil prices. A price increase in chemical and pharmaceutical products of 2.2 per cent was caused by higher prices of basic chemicals. Prices of basic chemicals have increased steadily over the past six months, and in February almost reached the historically high price level of May 2011. Prices in both domestic and export markets contributed to the growth in basic chemicals last month.

Oil up, gas down

Prices in extraction of oil and natural gas fell 0.3 per cent. The decline in prices in the industry was mainly due to lower export prices of natural gas. Prices of crude oil (Brent Blend, measured in NOK) increased by 2.7 per cent from January to February.

Twelve-month growth: prices up 7.6 per cent

From February 2011 to February 2012, the PPI increased by 7.6 per cent. As in the previous month, the largest contributors were extraction of oil and natural gas, refined petroleum products and food products, where prices rose by 16.7, 15.1 and 2.1 per cent respectively. Despite the price rise from January to February, prices in electricity have fallen 22.6 per cent in the last twelve months. Another industry with a significant price decrease in the period was basic metals. Prices in the industry fell 13.9 per cent due to lower prices in both iron and steel and non-ferrous metals.

For information on the commodity price index for the industrial sectors, see commodity price index for the industrial sector .