A thin oil film on the surface of water appears coloured due to:

 

Solution:

Concept: In physics, interference is the net effect of two or more wave trains moving on intersecting or coincident paths. The effect is the sum of the amplitudes of the individual waves at each point affected by multiple waves. interference 

A thin oil film on a water surface appears coloured due to thin-film interference, which occurs when light waves reflecting off the top surface of a film interfere with light waves reflecting from the bottom surface. 

Because oil has a higher refractive index than water, reflection occurs on the back side.