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Canada’s annual inflation accelerated to 4% in August from a 3.3% rise in July, mostly on the back of higher gasoline prices last month, Statistics Canada said on Tuesday, as high oil and gasoline prices stoke up inflation rates globally.
Gasoline prices in Canada increased by 0.8% annually in August compared to a 12.9% annual drop in July, the official Canadian data showed.
Excluding gasoline, the Consumer Price Index (CPI) in Canada rose by 4.1% in August, matching the same increase in July.
“In addition to facing higher energy prices, Canadians paid more for rent and mortgage interest in August,” Statistics Canada said.
In August, the annual gain in the gasoline index was partly driven by a base-year effect, as prices fell 9.6% month over month in August 2022, resulting from higher global oil production and lower refining margins. On a monthly basis, gasoline prices jumped by 4.6%, also contributing to the year-over-year increase in August 2023.
The monthly rise in gasoline prices was mostly due to higher prices for crude oil following production cuts from the OPEC+ group, according to the statistics office.
Higher gasoline prices lifted U.S. inflation numbers for August, too.
The rise in gasoline and diesel prices pushed U.S. inflation higher last month, prompting the White House to reach out to the oil and gas industry, to ensure stable supply.
Consumer prices in the United States rose by the most in 14 months, although the annual increase was a modest one. The big driver behind the price surge was gasoline.
The gasoline price rise has been uneven across states, hitting some harder than others. Georgia was one of the hardest hit and its Governor earlier this month declared a state of emergency and suspended taxes on gasoline and diesel for one month in order to cushion the blow of higher prices at the pump.
By Tom Kool for Oilprice.com
Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations