Research to assess the impact of rising oil prices on farming and the wider food chain was published by the Sustainable Development Commission on 19 November and can be found on their website.
One of the illustrative findings of this study is that a rise in the oil price from $50 (the average price seen in 2005) to $100 a barrel (which is just above current levels) would lead to an increase in household food expenditure of around £3 billion. This equates to an increase of 4 per cent. within a total spend of £79 billion, and presumes that all increased energy costs would be passed on to consumers. However, we might expect an increase in household expenditure of between roughly 5 per cent to 10 per cent. if all costs are passed on to consumers and secondary impacts are allowed for.
To further help put the impact of increasing fuel costs into context, it can be noted that oil prices more than tripled in the five years to October 2007 to over $80 a barrel, whereas retail food prices increased by 12.6 per cent. over the same period.