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Prices at the pump - why are they falling and will this continue?

Comparing fuel prices paid by consumers and the crude oil price

Annual percentage change in the price of crude oil and fuel prices paid by consumers

Annual percentage change in the price of crude oil and fuel prices paid by consumers

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The price consumers pay for fuel is strongly related to the price of crude oil, although it is less volatile and the effect of changes in crude oil prices are delayed.

The most recent data shows the crude oil price falling 25% on the year, so, are we in line for a big drop in fuel prices? Historical data says probably not. Looking back to late 2008 when the crude oil price fell by 40% on the year, the fall in the price paid by consumers only fell by 15%.

But this doesn’t mean consumers won’t see further falls in fuel prices in the coming months as OPEC (a group of oil producing countries that control a large percentage of the world’s oil supply) have agreed to keep the supply of oil high for the near future, which may lead to further falls in the crude oil price.

Would you like to see more on prices data?

Read our recent short story on “What is affecting prices in the UK in 2014?”

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If you have any comments or suggestions, we would like to hear them! Please email us at: ppi@ons.gsi.gov.uk

Categories: Economy, Prices, Output and Productivity, Price Indices and Inflation, Producer Price Indices
Content from the Office for National Statistics.
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