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Oil prices and the New Zealand economy


  • Felix Delbruck

    (Reserve Bank of New Zealand)


This article looks at New Zealand's oil consumption at a disaggregated level and discusses the consequences of movements in international oil prices for inflation, taking into account New Zealand's industry structure as well as the tax treatment of different fuel types. Relative to the size of its economy, New Zealand uses a comparatively large amount of oil as transport fuel. The evidence suggests that the indirect (cost-push) effects of higher oil prices on consumer prices could be quite large, substantially driven by higher transport services costs. How large they turn out to be, and whether they matter for medium-term inflation and monetary policy, will depend on factors such as the state of the economic cycle, the degree of competition in particular industries, and the extent to which inflation expectations are anchored.

Suggested Citation

  • Felix Delbruck, 2005. "Oil prices and the New Zealand economy," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 68, December.
  • Handle: RePEc:nzb:nzbbul:december2005:2

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    References listed on IDEAS

    1. Leslie Hull, 2002. "Corporate behaviour and the balance of payments," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 65, December.
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    Cited by:

    1. Alan Bollard & Mark Smith, 2006. "Major global developments in the new millennium," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 69, pages 1-14., June.
    2. Liu, Ming-Hua & Margaritis, Dimitris & Tourani-Rad, Alireza, 2010. "Is there an asymmetry in the response of diesel and petrol prices to crude oil price changes? Evidence from New Zealand," Energy Economics, Elsevier, vol. 32(4), pages 926-932, July.

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