Utility Prices Shoot Up

Increase in utility tariffs in September 2011 kept the Producer Price Inflation (PPI) high. The Public Utilities Regulatory Commission (PURC) on August 31 announced an increase in electricity and water tariffs by 7.0 percent and 6.72 percent respectively. This appeared to have impacted significantly on the utilities sub-sector as inflation went up by 7.37 percent during September 2011. High price of gold and other minerals also kept the monthly change of inflation in the mining and quarrying sub-sector up. The manufacturing sub-sector, which constitutes more than two-thirds of total industry, recorded the least inflation of 0.56 percent in September 2011. This means that prices of manufacturing items did not record much change. On year and year basis, mining and quarrying recorded the highest inflation of 50.74 percent, representing an increase in the rate of August 2011 followed by manufacturing with 16.52 percentage points rise, as against 16.27 percent recorded in August 2010. Utilities including production, transmission and distribution of electricity as well as collection, purification and distribution of water recorded the lowest year-on-year change of 7.67 percent. According to a provisional data released by the GSS yesterday, the Producer Price Index (PPI), which measures the average change over time in the prices received by domestic producers for the production for their goods and services, increased to 19.59 percent, as against 17.24 percent recorded in August 2011. According to the figures, increase in gold prices kept inflation in the mining and quarrying, with 13.97 percent share of all industry very high. Mining of metal ores and non-ferrous metal ores, except uranium and thorium ores, recorded inflation rates above the national average. Six out of the 16 major groups in the manufacturing sector recorded inflation rates higher than the manufacturing sector average. Manufacture of machinery and equipment recorded the highest inflation rate of 48.44 percent while tanning and dressing of leather and manufacture of hand luggage recorded negative rate of change. With regard to Petroleum Price Index, inflation has remained unchanged since February 2011. During the 12-month period (August 2010 to August 2011), the all industry recorded 24.29 percent, the highest producer inflation rate in April 2011.