What's happened
Fuel prices in the UK and US remain high amid falling oil prices, with UK pump prices not reflecting recent oil cost declines. US gas prices are also low but are expected to rise due to increased exports and inflation. Experts highlight industry profit margins and policy impacts as key factors.
What's behind the headline?
Fuel prices are influenced by multiple factors beyond crude oil costs. In the UK, refinery closures and high carbon charges have limited domestic production, allowing import costs and profit margins to inflate pump prices. Critics argue that industry margins are being maintained despite falling wholesale costs, suggesting profiteering. The UK’s decline to only four operational refineries exacerbates vulnerability to supply shocks.
In the US, gas prices are currently low due to increased oil supply and OPEC’s ramped-up production, which has kept crude prices below $60 per barrel. However, exports of liquefied natural gas (LNG) are set to rise, likely pushing wholesale gas prices higher in 2026 and beyond. This export-driven increase, combined with inflation and weather-related disruptions, will sustain higher household energy costs.
The contrasting narratives reflect industry and regulator tensions. UK retailers claim margins are stable, passing on rising costs, while critics highlight that profit margins remain high despite wholesale declines. In the US, government policies on exports and climate impacts are shaping future energy affordability. Overall, both markets face a complex interplay of supply, policy, and profit motives that will influence prices in the coming months.
What the papers say
Sky News reports that UK fuel prices have not fallen in line with oil costs, citing refinery closures and government carbon charges as key factors. The NY Post highlights that US gas prices are currently below $3 per gallon, driven by increased oil supply and OPEC production, but warns of future rises due to LNG exports and inflation. The Guardian emphasizes that US household gas bills are set to rise into 2026, driven by export policies and climate-related costs, despite recent declines in oil prices. These perspectives illustrate differing industry and regulatory narratives, with UK critics accusing the industry of profiteering and US analysts warning of long-term price increases due to export-driven inflation.
How we got here
Oil prices have declined since early 2025, but retail fuel prices in the UK and US remain high. UK refineries have decreased, and government carbon charges impact domestic fuel costs. In the US, inflation, export policies, and weather events have driven up household energy bills, despite recent drops in oil prices.
Go deeper
Common question
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Why Are Fuel Prices Still High Despite Falling Oil Prices?
Many people are surprised to see fuel prices remain elevated even as oil prices decline. This page explores the reasons behind this disconnect, including industry profits, policy impacts, and market trends. If you're wondering whether fuel prices will drop soon or what factors are influencing costs, keep reading for clear, concise answers.
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