Bulletin – December 2010 Developments in Utilities Prices Abstract

Large increases in the prices of utilities have been a notable feature of consumer price inflation in Australia in recent years, and further large increases are anticipated over the next few years. The recent price rises reflect the move towards cost-based pricing, the need to replace and expand infrastructure to meet demand, and rising input costs. At times, these increases in utilities prices have had a significant effect on aggregate inflation. While international comparisons are not straightforward, the level of electricity and gas prices in Australia does not, however, appear to be particularly high compared with prices in a number of other advanced economies.

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