Soaring petrol prices were a key factor behind a 0.8 per cent rise in the consumers' price index (CPI) in the March quarter and a 4.5 per cent rise for the year to March, Statistics New Zealand (SNZ) figures show.

The rise was slightly less than expected, with the median forecasts in a Reuters survey having been for a 1 per cent rise over the quarter and a 4.6 per cent gain on the year.

The Consumers Price Index for the March 2011 quarter also showed general prices were up 4.5 per cent from the same quarter a year ago, Stats NZ said.

They follow a 2.3 per cent increase in the December quarter due to the rise in GST on October 1 last year from 12.5 per cent to 15 per cent, and an annual increase in December of 4 per cent.

The annual increase of 4.5 per cent is the highest for any quarter since September 2008 when petrol prices peaked, although the latest rise included the effects of the GST hike, which raised general prices by 2.22 per cent, Stats NZ said.

The Reserve Bank of New Zealand (RBNZ), which is tasked with managing medium-term inflation expectations between 1-3 per cent, had forecast a 4.4 per cent increase in the annual CPI for March.

With the headline figure of 4.5 per cent coming in similar to the RBNZ's expectations, it should do little to change the central bank's outlook for when it may have to increase the Official Cash Rate (OCR).

Indications are it will look to hold the OCR at its record low of 2.5 per cent for most of 2011, with some economists picking a 25 basis point increase to 2.75 per cent to be delivered on December 8, as inflationary pressures from the rebuilding of Christchurch start to flow through to the wider economy.

The Reserve Bank has previously said it would look through the short-term implications of the GST hike last year.

The main contribution to the 0.8 per cent quarterly rise in the CPI came from transport costs, up 2.5 per cent due to higher prices for petrol and diesel, Government Statistician Geoff Bascand said in a media release. Petrol prices rose 9.7 per cent over the quarter.

Cigarette and tobacco prices rose 9.4 per cent over the quarter from December, influenced by a 11.64 per cent rise in excise duty on January 1 this year.

"If prices for petrol, diesel, cigarettes and tobacco had remained unchanged from the December 2010 quarter, he CPI would have risen by 0.1 per cent," Bascand said.

Food prices rose 1.2 per cent, due to higher prices for grocery food and meat, poultry and fish, Bascand said.

Meanwhile the most significant falls in prices over the quarter came from the recreation and culture subgroup, down 1.7 per cent, and the household contents and services group, down 1.9 per cent, Bascand said.

The annual rise in the CPI of 4.5 per cent included the 2.22 per cent increase in GST last year, Stats NZ said.

Transport costs rose 8.2 per cent over the year, including a 17.1 per cent rise in petrol prices.

Cigarette and tobacco prices rose 26.1 per cent, while electricity prices rose 6 per cent.

"If prices for petrol, diesel, cigarettes and tobacco had remained unchanged from the March 2010 quarter, the CPI would have risen by 3.0 per cent annually," Bascand said.

- INTEREST.CO.NZ