Hi
Ok, I will do my best here.
The recent (last few months) price madness is basically because of the traders.
As the value of the dollar has dropped, people have moved their money out of the FX and into the commodity markets, as oil has risen on this trading, every other commodity has gone up. As an example, scrap prices have doubled in some countries, UK price FOB (free on Board) was at £131 in November, this month it is at £320+. It costs more for the scrap to melt into steel than it does for the finished steel.
So, now people are trading crude for July (futures) the price has gone up from $128 to $135 (now dropped to about $132 closing of brent market on 23/05/08) This means that in about 3 weeks prices will rise again as the future price (July) has gone up, so everything from food to heating fuel, jet fuel & diesel goes up (10% of a barrell is jet fuel, 25% is refined into diesel)
Oil companies are also trading on their own crude futures profiting twice (double (dipping).
There is also a huge demand from both India and China, with the recent earthquake in china, they now need even more fuel, cement prices will rise as they will be buying Millions of tons for rebuilding.
Tax on fuel right now stands at around 70%. This is mainly because the conservatives intorduced the tax esculator on fuel, although this was abolished the Government still put their tax on fuel (fuel duty + 17.5% VAT)
As for using less oil, this won't bring the price down, it will push the price up. Oil companies are in business to make money (lots of it) and if usage was to drop by a huge amount, they would have to increase the price to get the same return. similar to say a CC working himself mental for £20 a room, then putting his prices up to £50 a room, less output for more money.
If you were to use an extra £25 (just on fuel alone) a week, over 50 weeks (2 week hols for which you are paying extra for jet Fuel) that's an extra £1250 your business has to pay just to run your business, this means the price has to go up, this may mean you will price yourself out of the market (I said MAY) Plus you are paying extra for car tax, ins, your food costs more, mortgage is higher, heating bills are higher etc, etc.
Regards
Martin