Bermuda's rate of inflation continued to soar in November with prices being an average of 3.8 percent higher than a year ago, according to Government figures released yesterday.

The average rate of inflation for the year - based on Consumer Price Index (CPI) figures from January through February - stood just under 3.5 percent, with Finance Minister Paula Cox predicting earlier this year that it would not average out any higher than that for 2004.

So far in 2004, inflation rates tracked at three percent and up, including reaching 3.9 percent in September. For the month of November, the Island's rate of inflation was higher than its major trading partners with the US recording inflation levels of 3.5 percent, while Canada's rate came in at 2.4 percent and the UK recorded 3.4 percent.

Year-on-year, the biggest price increases in Bermuda were seen in the health and personal care sector with goods costing an average of 9.8 percent more this November over a year ago. Month on month, the health and personal care sector saw no real movement in November, with October already recording increases because of higher medical costs.

For the first 11 months of 2004, the biggest driver of increased costs in this sector was likely higher medical costs with there being a 17.1 percent surge in the price of insurance premiums in April.

There were also several months this year, when the Consumer Price Index - with measures prices based on a fixed basket of goods - recorded increases in the cost of personal care supplies.

George Grundmuller, head of the Phoenix group of stores - which owns five of the Island's 12 pharmacies - yesterday told The Royal Gazette the company had not increased their mark up in 2004. He did allow though that there would have been some price increases for consumers that were out of his control. This would have been seen if there was a price increase from the manufacturer's end or in the case of English and European items costing more to bring in, as a result of the low US dollar compared to the English pound or Euro.

"A year ago, I was paying $1.42 (dollar to pound) and now I'm paying $1.92," Mr. Grundmuller said.

That swing in the cost of currency means items from England and Europe - with Mr. Grundmuller saying the company imports both beauty products and medications from that region - will have seen a jump at the cash till.

Another item carried by the Phoenix that has seen a surge in pricing, for the same reason, was the price of imported newspapers with a Sunday English newspaper this week costing more than $10.

Tobacco and liquor were also dearer at the cash register with these goods costing 6.2 percent more in November then they did a year ago.

There was no real fluctuation in pricing month on month for this sector after consumers saw stiff increases in March for cigarettes after a higher Government 'sin tax' pushed prices up.

Items in the education, recreation and reading segment also gained through the year with several months recording higher pet care costs. This was again the case in November with a one percent increase in the average cost of pet upkeep.

The good news is that consumers paid out less at the gas pump in November, but that may be little comfort with the lower price being down on highs reached in prior months.

The net effect of lower prices in November and December is consumers paying out five percent more to fill their tanks than a year ago.

The CPI recorded a 2.3 percent decline in the price of premium gas while the cost of mixed gas fell 2.2 percent.

David Rose, oil products manager for the Shell Company of Bermuda Limited, said prices went down considerably in November and again, in December, with there being a drop of 7.8 cents a litre for gas.

That put the price of a litre of gasoline, at the end of December at $1.36. Mr. Rose said that compared to consumers paying out $1.31 per litre at the pump in December, 2003.

"It is up 4.6 percent," year on year, after reaching a high in September, which Mr. Rose cited as "somewhere near normal".

As for what is going to happen with fuel pricing "is anybody's guess," Mr. Rose said.

"We have a mess in California (with the mudslides), and winter is kicking in in New England. You normally get a swing in pricing in January and February (because of higher heating costs in cold climates)."

On top of those factors, Mr. Rose said crude oil prices had again gone up early this week to around $47 a barrel.

He could not predict what would happen in terms of Bermuda's fuel pricing, with the new price this month not due to be set until Monday.

It is known though that increases are coming from Belco which is raising its base rate for the first time in nine years.

Belco president and CEO Garry Madeiros said fuel costs were a big driver in where the company sets its electricity pricing.

On top of the recently announced rate increase, the fuel adjustment cost that is also part of the Belco electricity bill - and fluctuates depending on fuel prices - has risen to 5.3 cents per kilowatt.

When asked if fuel prices - which have been going up globally for much of the year - might peak soon, Mr. Madeiros said: "I'm not sure anybody really has the right answer. One factor is the winter, and how that drives fuel costs because of supply and demand. And the war continues to be a big driver to date," with large reserves of oil being in war-torn Iraq.

"I don't personally think that the costs will be too much higher, but more importantly, the real question is when are they going to come down. People are asking do you see any relief. The answer is I don't see any relief in the short term and I don't think we'll see oil prices where they were before but it is cyclical. Conventional wisdom is that prices won't go down in a hurry and that prices have not reached peak, but we do live in hope."

Bermuda consumers have also weathered higher prices, year on year, at the grocery store (with food costs climbing 2.4 percent year on year and 0.5 percent from October to November), rents have risen by 2.5 percent from November 2003 to this November, clothing and footwear prices are up 1.5 percent, household goods, services and supplies have risen 1.2 percent and items in the transport and vehicle sector are costing consumers, on average, 5.1 percent more year on year.