How Oil Prices Affect Your Finances: From Petrol to Energy Bills

The price of oil is one of the most pervasive prices in the modern economy. When it moves significantly, almost everything you buy is affected.

The Direct Effect: Petrol and Diesel

Roughly 40–45% of the pump price is determined by crude oil. The rest is fixed fuel duty (57.95p/litre) and VAT. So when Brent falls 10%, expect a 4–5p/litre pump reduction — not 10%.

Energy Bills

Natural gas often moves with oil prices. A sustained oil fall tends to eventually reduce gas prices, which Ofgem passes through in quarterly price cap reviews.

Flights

Jet fuel is 20–30% of airline costs. Oil spikes → fuel surcharges. Falls → airlines are slower to pass savings on.

Food Prices

Oil affects agricultural machinery (diesel), fertilisers (natural gas) and refrigerated logistics. CPI food typically lags oil changes by 3–6 months.