Australia’s inflation struggles are continuing with the Consumer Price Index rising 4.6 percent in the year to March off the back of fuel cost blowouts.
The annual inflation figure has ballooned from 3.7 percent in February and its now well out of the Reserve Banks’s sub-three percent comfort zone.
The Reserve will now have to decide if it will increase interest rates to slow the CPI growth or ignore the one-off impacts of the Middle East war.
Federal Treasurer Jim Chalmers has previously warned that inflation might hit five percent off the back of the fuel shock.
Australian Bureau of Statistics head of prices statistics Sue-Ellen Luke said annual inflation was now at its highest level since September 2023.
Housing, due to its index weighting, was the largest contributor to annual inflation in March, with a rise of 6.5 percent. This was followed by an 8.9 percent rise in transport costs.
In the March quarter transport rose 9.2 percent, due primarily to a 32.8 percent monthly increase in automotive fuel prices.
With this major distortion taken out, “trimmed” inflation was unchanged at 3.3 percent in the 12 months to March 2026.
‘Automotive fuel prices rose 32.8 percent from February to March, which pre-dates the halving of the fuel excise on April 1,” Ms Luke said.
“The increase in March is the largest monthly increase since the series began in 2017, reflecting the impact of the conflict in the Middle East on fuel prices.”
Average prices for regular unleaded petrol rose 33 percent, increasing from 171 cents per litre in February to an average price of 228 cents per litre in March.
Premium unleaded rose 30 percent between February and March, with average prices rising to 250 cents per litre.
Diesel, which contributes 10 percent of the automotive fuel expenditure class, had a 41 percent rise in average price, increasing from 181 cents per litre in February to 256 cents per litre in March.
The full report is on the ABS website.
