Oil’s Jump Renews the Pressure on Petrol and Energy Bills
The weekend escalation in the Gulf has reversed the recent easing in fuel prices, with oil climbing around 4% to about $79 a barrel as markets reopened on Monday. Petrol had been falling as the war premium drained away — the average pump price sits near 153p a litre, still around 20p above pre-conflict levels — but the renewed jump threatens to halt that decline. Motoring groups had welcomed the fall; a sustained disruption to the Strait of Hormuz would push prices back up, feeding into inflation just as a new government takes office.
The transmission from a Gulf chokepoint to a British forecourt is quick: even the threat of a Hormuz closure puts a premium into crude, which reaches pumps within a fortnight and energy bills within weeks. The timing is awkward for the incoming government, which inherits public finances already stretched and a chancellor-in-waiting pledged to discipline; a fresh inflation shock would narrow his options and reopen the argument over the 5p fuel-duty cut, frozen to the end of the year. The Bank of England would face the same bind that has dogged this whole conflict — oil-driven inflation against a slowing economy. For households, the practical read is that the welcome fall in pump prices may now stall or reverse. Watch the oil price through the week, whether ministers signal more duty relief, and the read-through to the next inflation figures.