Consumer prices fell 0.9% in July 2009 compared with July 2008, following a 0.3% decrease in June, Statistics Canada said Wednesday.

Prices also fell on a monthly basis, dipping 0.3% lower from June to July.

The 12-month change in the consumer price index fell to minus 0.9% from minus 0.3% in June.

Gasoline prices were the biggest contributor to the deflation. In July, consumers paid 4.1% less at the pump over the previous month, and 28.3% less compared to last July.

The average price for unleaded gasoline was 97.4 cents per litre in July 2009, compared to a record high of 136.6 cents per litre in July 2008.

Excluding energy, the all-items consumer price index (CPI) rose by 1.8% in the 12 months to July.

Food was the major contributor to upward pressure in prices, rising 5%. That follows increases of 5.5% in June and 6.4% in May in the category.

Growth in food prices has been slowing since reaching a peak of 7.9% in March 2009, due to the slowdown of price increases for fresh fruit and vegetables and meat.

12-month change in the Bank of Canada’s core index

The Bank of Canada’s core index advanced 1.8% over the 12 months to July, following a 1.9% rise posted in June.

The seasonally adjusted monthly core index posted no change from June to July, after increasing 0.2% from May to June.

IE