OECD Price Comparison: How do we stack up?

As households and small businesses are notified of changes to their energy prices for the financial year, there continues to be scrutiny of our power prices. With energy affordability an ongoing concern for Australians, comparisons with overseas energy markets are common with consideration of how Australia's costs compare to other countries. To get the facts, we take a look at how our electricity prices stack up against other developed nations. Using the latest data across 38 OECD countries, we’ve ranked electricity prices (in AUD $ per kWh) from highest to lowest.

Residential Electricity Price Comparison (Nominal)

Figure 1 shows residential electricity costs across OECD countries, factoring in both fixed and variable costs and converted into a c/kWh measure. The first quadrant includes the most affordable electricity markets, such as Turkey (10 cents), Mexico (16 cents), Hungary (17 cents), and Canada (19 cents). The second quadrant consists of mid to low priced countries like Finland, Chile, and New Zealand (31 cents).

Australia, with a residential electricity price of 39 cents per kWh, sits just above the OECD average of 38 cents. More expensive nations include Lithuania (42 cents), France (43 cents), and Estonia (44 cents) with moderately high electricity costs.

The fourth quadrant includes the most expensive countries, such as Belgium (61 cents), Germany (61 cents), Italy (66 cents), and Ireland (69 cents).

Figure 1: Residential Household Electricity Price (AUD $ per kWh)

Source: GlobalPetrolPrices.com (2023-2025 average data)

However, comparing electricity prices without considering differences in living costs across countries can be misleading. The cost-of-living index measures the relative prices of consumer goods and services - including groceries, dining, transportation, and utilities, but excludes housing costs like rent or mortgage payments. With a cost-of-living index of 100 (see attached Appendix), Australia ranks among the top 8 expensive OECD countries for everyday goods and services, making affordability comparisons important when comparing energy costs.

Example:

Australia’s residential electricity rate is 39 c/kWh, and since it serves as the baseline (Cost of Living Index = 100), its adjusted rate remains the same. In comparison to Australia, the cost of living in New Zealand is 9.2 per cent cheaper, so the same nominal electricity price represents a much bigger burden on New Zealand householders relative to their other expenses and purchasing power. As such, when adjusted for its lower cost of living (index = 90.8), New Zealand’s nominal rate of 31 c/kWh becomes 34 c/kWh, showing it's actually less affordable than it first appears.

Similarly, Switzerland, despite a high nominal rate of 55 c/kWh, has a very high cost of living index of ~162 (everyday expenses are ~62 per cent higher than in Australia, excluding rent and mortgage payments). Once adjusted, its electricity feels more affordable as it is equivalent to 34 c/kWh in Australian terms.

Residential Electricity Price Comparison (Adjusted with cost-of-living index)

By adjusting according to different countries’ cost-of-living indexes (excluding rent)[i], gives a more accurate comparison of energy affordability across OECD countries. Figure 2 highlights where electricity is truly expensive or affordable in practical terms. For example, countries like Turkey, Mexico and Hungary which already have low nominal electricity rates, continue to have some of the lowest electricity rates, indicating genuine affordability. However, nations such as Colombia, Chile and Poland see their adjusted rates rise sharply. The adjusted rates place them into the highest quadrant as electricity is relatively less affordable for the residents. This least affordable quadrant still includes Ireland, Italy, Germany, Belgium, UK and Czech Republic even after adjusting the values.

Interestingly, when comparing utility costs internationally, Australia ranks 15^th in terms of affordability. We sit below the OECD average (45 cents) when considering broader economic conditions impacting on daily expenses.

Figure 2: Residential Electricity Prices Across OECD Countries Adjusted for Cost of Living (Excl. Rent, Australia = 1.00)

Source: GlobalPetrolPrices.com (2023-2025 average data); Cost of Living Index 2025 Year

Business Electricity Price Comparison (Nominal and Adjusted)

While residential electricity prices are a key concern for households, business electricity prices play a big role in national competitiveness and industrial productivity. To access energy affordability for business more meaningfully across countries, we apply the same method by making adjustments to Australian benchmarks. For residential electricity, the cost-of-living index (excluding rent) is used because this reflects how energy prices fit into household budgets (groceries, dining, transportation and utilities). In contrast, local purchasing power is applied to business electricity cost because it reflects how affordable electricity is relative to business’ operational costs and wages.

Turkey, Mexico and Colombia which have lower wage levels, see significantly higher adjusted business electricity prices, with Colombia (power purchasing index = 27) topping the list at $1.15 per kWh (see figure 3).

Italy ranks second highest at $1.12 per kWh. High residential and business utility bills in Italy reveals the deep affordability challenges faced by both households and businesses. The country’s heavy reliance on imported natural gas exposes it to costlier global price fluctuations and supply disruptions. Taxes, environmental charges, and network fees surcharges (often used to fund green energy initiatives or infrastructure investments), inflate the costs further.

Iceland (13 cents), Norway (18 cents), Canada (20 cents) maintain their positions in the lowest electricity costs even after adjustment. Interestingly, while US and Luxembourg have higher nominal rates, their strong local purchasing power (108, 131 respectively) brings adjusted rates even well below Australia’s benchmark of 36 cents/kWh.

Australia, Netherlands, Denmark, Switzerland, Belgium and Germany have their nominal rates higher than the OECD average. But their adjusted utility business cost place them below the OECD average. This emphasizes that affordability is not just about the price per kilowatt on their business electricity bill, local income level and cost structure play key roles in assessing the energy cost burden for businesses.

Figure 3: Business Electricity Prices Across OECD Countries Adjusted for Local Purchasing Power

Source: GlobalPetrolPrices.com (2023-2025 average data; data is not available for New Zealand, Sweden and Ireland); Cost of Living Index 2025 Year

Appendix:

[i] Cost of Living Index (Excluding rent): This index measures the relative prices of consumer goods and services - including groceries, dining, transportation, and utilities—but excludes housing costs like rent or mortgage payments. For example, a city with a cost-of-living index of 120 suggests that everyday expenses are 20% higher than in Australia, excluding rent.

The sources and methodology used to determine Australia’s electricity prices can be found here.