How Oil Prices Reach the Petrol Pump, With Worked Numbers

Headlines about oil are always in dollars per barrel. Your petrol is bought in pence per litre. Here is how one turns into the other, with a worked example you can adapt.

Step 1: From barrels to litres

One barrel of oil is about 159 litres. So a $10 change in the barrel price is a change of about $10 ÷ 159 = 6.3 US cents per litre of crude.

Step 2: From dollars to pence

This depends on the exchange rate. As an illustration, assume £1 = $1.30. Then 6.3 US cents is about 4.8p.

Step 3: Add VAT

VAT at 20% applies on top, so 4.8p becomes about 5.8p at the pump.

So, as a rough rule, a $10 rise in the barrel price adds about 6p a litre to the pump price, if nothing else changes. At a weaker pound, say £1 = $1.20, the figure is a little higher. At a stronger one it is lower. These are illustrations, not forecasts.

Why the real picture is messier

• Refined fuel has its own price. Petrol and diesel are traded separately from crude. If diesel is in short supply, its price can jump even when crude does not move. Late 2026 has been a case in point, with diesel about 25p above petrol.
• It takes time. Stations hold stock, and wholesale contracts move with a delay, so changes in crude usually reach pumps over days or weeks.
• Rises are quicker than falls. See why fuel prices fall slower than they rise.
• Duty and VAT are in the price. Duty is a fixed 52.95p a litre, so a fall in oil does not cut that part. See fuel duty explained.

What the numbers mean this year

In late September 2026 Brent crude was reported back above $100 a barrel, with shipping through the Strait of Hormuz heavily restricted. Prices at UK pumps rose through the spring and summer. By early November, prices had eased to around 170p for petrol and 198p for diesel. If the barrel price fell by $10, the rule of thumb suggests about 6p a litre off, which would be about £3.30 on a 55-litre tank.

What to watch

• Brent crude: the international oil price benchmark
• The pound against the dollar
• Diesel supply news, which affects diesel more than petrol
• Government announcements, such as the Budget

For the full list see what affects the price of petrol and diesel.

What to do

Do not try to time the market. Prices are unpredictable, and the difference between stations is bigger than most week-to-week moves. Search your postcode and fill up where it is cheapest right now.