Will new drilling lower bills?

Bills are shaped by wholesale markets, but domestic production keeps more jobs, investment and tax revenue in Britain while demand remains.

British oil and gas is sold at market prices. North Sea gas, Norwegian gas and imported LNG all compete in the same wholesale market, which helps determine what households ultimately pay.

But where that energy is produced still matters. Domestic production supports UK jobs, investment, supply chain activity and tax revenue. When the same energy is imported, more of that economic value goes overseas.

The OBR forecasts oil and gas tax receipts falling from £4.1 billion in 2025–26 to £0.1 billion by 2030–31 under the current outlook. OEUK estimates that introducing the proposed Oil and Gas Price Mechanism in April 2027 could unlock investment in the remaining UKCS potential and generate an additional £13.4 billion in direct and payroll taxes over ten years.

New production cannot control international energy prices. But it can help keep more jobs, investment and revenues in Britain, giving government greater resources to support households and businesses when prices spike.