Reserve Bank calculations suggest that the direct effect on inflation from the oil price spike has so far been to add around 0.3 percentage points per annum to annual CPI inflation since 2004, when New Zealand petrol prices started to rise steeply. Indirect effects, for example through higher taxi charges, account for another 0.2 percentage points per annum.
Survey measures of inflation expectations have also increased over this period, suggesting there may be expectations dynamics at work, though it is difficult to identify the specific oil price effects as distinct from the effects of the other shocks discussed below. 4.