Central Bank: Energy costs surge 18.9

Mon, Jun 11th 2012, 09:29 AM

Surging oil prices have triggered a rise in inflation of 3.2 percent in April, according to the latest Central Bank report, with energy costs spiking 18.9 percent year-on-year.
The figures were revealed in the Central Bank's Monthly Economic Financial Developments (MEFD) report, which outlined specific areas where inflation increases have been felt.
"Buoyed by the pass-through effects of elevated international oil prices, domestic inflation firmed by 1.4 percentage points to 3.2 percent over the twelve months to April," the report from the Central Bank said. "This outturn, mainly reflected an 8 percent surge in transportation costs -- which are directly affected by fuel prices -- alongside gains for furnishings, household equipment and maintenance (3.9 percent), housing and other related items (3.2 percent) and restaurant and hotels (3.1 percent) costs. All of the other categories recorded growth rates of less than 3.0 percent."
Domestic energy costs experienced the highest rate of inflation compared to the same period last year, with fuel charges from the Bahamas Electricity Corporation (BEC) increasing by 1.9 percent on a monthly basis - ultimately leading to the 18.9 percent rise year-on-year. The price per kilowatt hour grew to $26.50 in April.
The average cost for diesel and gasoline were also up during April, which was 14.4 percent and 8.9 percent higher than the same period last year respectively. The median price for both diesel and gas were up by 7.8 percent and 2.8 percent over the review month, according to the report.
With international oil prices creating a domino effect on inflation and energy costs in April, the possibility of lower prices going forward is possible, given that the price per barrel has dropped to $84.10 per barrel, compared to when it was $104.23 in April.
The reduced cost on the global level is a signal that Bahamians will start to see better prices at the gas pump, according to the head of the Bahamas Petroleum Retailers Association (BPRA) Phillip Kemp. He said that the lower fuel costs will allow the country to avoid a record breaking summer in terms of prices, and the positive effects from it will be felt in the transportation sectors, specifically aviation.
Going forward, despite the potential that reduced oil prices has to lowering inflation, the Central Bank report said that "firming in inflation is projected in the near-term, as international oil prices remain elevated".
The MEFD report can be seen in its entirety on the Central Bank's website.

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