Oil prices — and what they mean for your wallet

How an oil shock reaches your wallet

Typical pass-through chain with typical delays. These are historical patterns, not promises — every shock plays out a bit differently, and other forces (taxes, exchange rates, competition) push prices too.

1. 1

   Crude oil day 0

   The raw material price moves first — it's traded worldwide every minute.

2. 2

   Fuel at the pump & diesel typically ~2–6 weeks later

   Refineries and petrol stations pass higher crude costs to drivers. Diesel matters double: almost everything you buy travels on a diesel truck or ship.

3. 3

   Freight & shipping typically ~1–3 months later

   Shipping lines and truckers add fuel surcharges. Moving goods gets more expensive across the board.

4. 4

   Asia's factory gates typically ~2–6 months later

   Factories in China and across Asia pay more for energy, plastics, chemicals, and freight — and start charging more for the goods leaving the factory. In the last big shock, China's factory-gate prices peaked in late 2021, months before goods inflation peaked in Western shops in 2022.

5. 5

   Food, electronics & everyday goods typically ~3–12 months later

   Farming (fertiliser, tractors, transport) and manufacturing (plastics, chemicals, freight) slowly bake the higher costs into shop prices.

Asia's factory gates — the link measured directly

China's producer price index (PPI) tracks what factories charge for goods as they leave the factory gate — step 4 of the chain above, measured every month by China's statistics bureau.