Norway inflation jumps to 3.6% as fuel prices surge due to Iran war

Norway’s annual inflation rate rose to 3.6% in March, accelerating by 0.9 percentage points from the previous month, driven largely by a sharp increase in electricity and fuel prices, according to official data released by Statistics Norway on Friday.

The surge was led by a record-breaking rise in fuel costs, with prices for fuel and lubricants jumping 17.9% from February to March — the strongest monthly increase ever recorded in the consumer price index.

A statement from Statistics Norway said the war in Iran and uncertainty surrounding global oil supplies had a significant impact on fuel prices during the month, marking the most pronounced spike since the early phase of the Russia-Ukraine war in 2022, though that increase had unfolded over a longer period.

On an annual basis, fuel and lubricant prices were up 14.7% in March, with gasoline and diesel prices rising 18.7% and 23.6%, respectively, on a monthly basis.

Core inflation, which excludes energy and tax changes, held steady at 3.0% year-on-year in March, unchanged from February.

Despite the surge in energy-related costs, falling food prices helped moderate overall inflation. Food prices declined 2.6% month-on-month and rose just 1.1% compared to a year earlier, marking the lowest annual increase since March 2022.

Elsewhere, price developments were mixed across categories. Clothing and footwear prices rose 3.1% from February, reflecting the end of seasonal sales and the arrival of spring collections, though annual growth in the category eased.

Prices for furniture, household goods, and home maintenance increased 1.1% on the month, pushing annual growth in the category up to 2.4% from 0.6% previously.

The Iran war, which started on Feb. 28, has disrupted flows through the Strait of Hormuz, a key artery for global crude and LNG trade, resulting in a severe energy shock globally.