High Gas Prices Push Up Wholesale Prices

5:50 PM, Sep 14, 2012   |    comments
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WASHINGTON (AP) - A sharp rise in gasoline costs drove up wholesale prices last month by the most in more than three years. But outside energy and food, price gains were mild.

The Labor Department's producer price index, which measures price changes before they reach the consumer, jumped 1.7 percent in August. The increase was mostly because gas prices soared nearly 14 percent, the biggest gain in three years.

Food prices rose 0.9 percent, driven up by steep increases in the cost of eggs and dairy products.

Excluding the volatile food and gas categories, core wholesale prices rose only 0.2 percent, below July's increase.

In the past 12 months, wholesale prices have increased 2 percent, a mild gain and far below the recent peak of 7.1 percent in July 2011. Core wholesale prices have risen 2.5 percent in the past year, the same annual pace as in July.

Analysts at Oil Price Information Service and the Triple A of WNY say prices did shoot up in August and especially in recent days due to factors like Hurricane Isaac and the unrest in the Middle East. This is also the time of year when oil refineries switch over from the summer blends of gasoline to the winter blends. That may also affect supply to a degree. Summer gas tends to be more expensive because it is refined with certain formulas to reduce emissions.   

Those analysts predict prices will begin to taper off a bit later this month. But they do point out that global issues or weather could again be factors.

 Triple A says the current average price in Western New York is $4.04 a gallon as compared to $3.86 for the national price. Last September the average price was $3.78, in 2007 it was $2.92, and ten years ago in 2002 the average price for September was $1.52.        

AP & WGRZ

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