Navigate Up
Sign In
Energy prices are volatile, but are they rising more quickly than general inflation?

Energy prices are volatile, but are they rising more quickly than general inflation?

Posted on: 6/25/2018 | Author: ATB Financial's Economics + Research Team

​​If there’s one thing we all love to gripe about, it’s the price of gas at the pump. Or, the power bill. Or, the natural gas bill. Energy is crucial to our daily lives, so energy prices matter.

But are energy prices rising more quickly than overall prices?

The heavy red line in the graph below shows movements in the all-items consumer price index (CPI) in Alberta. In May of this year, annual CPI inflation clocked in at 2.6 per cent. That’s the highest it’s been since October of 2014. Still, inflation in Alberta has been relatively tame, averaging only 1.5 per cent over the last 10 years.

The blue line in the graph, on the other hand, shows price movements in the energy sub-category of the consumer price index. This includes electricity, natural gas, fuel oil and gasoline. Over the last 10 years, the energy sub-index has swung up by as much as 30 per cent and has also plummeted by 30 per cent. This reflects some extreme volatility in the prices for gas, electricity and home heating fuels.

But the volatility shouldn’t trick us into believing that energy prices are rising more quickly than everything else. In fact, since May 2008, average annual inflation in the energy sub-category has risen by only 0.8 per cent. That compares to 1.5 per cent for the all-items index.

In other words— believe it or not— energy prices are rising less quickly than most other items.

CPI, graph​​​​

Share this article:

GlassdoorThis icon serves as a link to download the
eSSENTIAL Accessibility assistive technology app for individuals with physical disabilities. It is
featured as part of our commitment to diversity and inclusionDiversity and Inclusion

About ATB | Contact Us | Find a Branch or ABM | Current Rates | Privacy and Security | Legal | Code of Conduct | Site Map | Supplier Resources

©ATB Financial 2019. All rights reserved. ATB Financial is a trade name/registered trademark.

ATB Financial