From groceries to home loans, high oil prices permeate daily life
USO•Oil reached a five-month high of $110 a barrel, while gas prices in Asia and Europe hit their highest levels since December 2022. Higher energy costs are adding pressure to household budgets through transport, heating, food, packaging and borrowing costs.
1. Fuel and heating costs
Global diesel prices have risen to record highs, with average British pump prices reaching £2.00 per litre this month and US prices hitting a record $6.53 a gallon in September. New York heating bills will likely rise 47% from last year, while British households could see a 10% year-on-year increase in gas bills this quarter.
2. Higher mortgage repayments
Energy-driven inflation is contributing to elevated borrowing costs. In Australia, a rise in interest rates from 5.5% in 2025 to 6.2% now increases annual repayments by around A$3,900 on an average A$731,000, 30-year mortgage. US 30-year mortgage rates climbed from around 6.1% to about 7.5%, while mortgage purchase activity weakened.
3. Food and product prices
Higher crude prices also affect plastics and packaging, which typically represent 5% to 15% of a grocery product’s manufacturing cost. US plastic prices rose 7% in August versus October 2025, and the United Nations’ Food and Agriculture Organization data showed global food inflation poised to accelerate further and persist well into 2027.
