Energy end-use prices influence overall energy demand and the fuel mix, which in turn determine environmental pressures caused by energy activities. They also help internalise environmental costs. Though price elasticity varies considerably by end-use sector, historical and cross-country experience suggests that the overall price effect on energy demand is strong and that increases in energy prices have reduced energy use and hence its environmental impact.
The indicators presented here relate to:
Energy end-use prices and taxes for selected energy sources and for industry and households.
Real price indices are calculated using the Paasche method and deflated using the country-specific producer price index (industrial sector) and the consumer price index (household sector).
When analysing energy end-use prices, consideration should be given to the various support measures that may provide a benefit or preference for a particular activity or product, either absolutely or relatively. Equally, when examining energy taxes, consideration should be given to the range of energy products taxed, tax base definitions, and tax rate levels and rebates.
Energy prices and related taxes, whether for industry or households, vary widely among countries for all types of energy.
Real end-use energy prices have been relatively stable in most OECD countries up to the early 2000s, though rates of change differ greatly among countries. Since then, real end-use prices have increased mainly due to a rise in crude oil prices.
Care should be taken when comparing end-use energy prices, and the way that energy use is taxed. In view of the large number of factors involved, direct comparisons may be misleading. However, comparisons may be the starting point for analysis of differences observed.