NEW ZEALAND BUSINESS NEWS
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Petrol prices climbed 6.4 per cent in September compared with August, and diesel rose almost 8 per cent, according to Stats NZ. The agency’s prices collected for the month also showed increases across electricity and gas, airfares, commercial accommodation and rents.
Global energy prices have stayed elevated through renewed US-Iran tensions and pressure on fuel supplies. Fuel makes up roughly 4 per cent of the consumer price index, the broad measure of inflation.
The September petrol level was above the level in March, but still below the peak reached in April. Measured against a year earlier, petrol is more than 24 per cent dearer, and diesel is close to 56 per cent more expensive.
Food prices were unchanged for the month, yet the annual rate moved up to 2.4 per cent from 1.9 per cent in August, which had been a 20-month low.
Fruit and vegetables fell 2.7 per cent for the month and were 1.8 per cent cheaper than a year earlier. Onion prices were up 86 per cent over the 12 months, the highest annual increase on record. Chocolate, restaurant meals and food kits also became more expensive.
Those increases were offset by softer prices for meat and dairy products, which held the monthly food figure flat. Food accounts for about 19 per cent of the consumer price index.
The basket of goods and services measured in the release covers roughly half of the consumer price index. Across that group, prices rose 1.4 per cent for the month. Excluding fuel and energy, underlying inflation still came in at 1.1 per cent for the three months ended September.
That is a considerably stronger result than had been expected. The figures indicate that cost pressures currently outweigh the economy’s spare capacity in setting the path of core inflation.
Headline inflation reached a two-and-a-half-year high of 4.1 per cent in the year ended June. Official figures for the September quarter are due on 22 October 2026.
The early expectation is that the annual rate will ease slightly. Any dip is likely to be short-lived, with resurgent fuel prices, higher building costs and airfares expected to push the annual rate back above 4 per cent.
Fuel is a direct input for transport, freight, delivery, and field-based service businesses, and a 24 per cent annual increase in petrol and a 56 per cent annual increase in diesel flow quickly translate into higher operating costs. Firms that absorb those costs see margins compress; firms that pass them on add to the price pressure already showing in the index.
The risk flagged in the figures is that higher fuel costs become persistent and feed into wider wage and price setting. For small and medium operators, that means fuel-heavy cost lines are worth reviewing now rather than after the September quarter data lands on 22 October 2026, and that any repricing decisions should be made with the possibility of a sustained period of elevated input costs in mind.
Higher inflation for longer would also complicate the Reserve Bank’s setting of the official cash rate, which feeds through to the borrowing costs that many businesses carry on plant, stock and premises.
Electricity and gas, airfares, commercial accommodation and rents all rose in September, so the cost pressure is not confined to the forecourt.
The September quarter consumer price index is scheduled for release on 22 October 2026.
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