Pakistan’s industrial sector faces high electricity costs, nearly double that of major economies like China, India, and the United States. A recent report by the International Energy Agency (IEA) highlights that power tariffs in Pakistan’s energy-intensive industries average 13.5 cents per kilowatt-hour (kWh), significantly higher than the US, India, China, and even the European Union.
In comparison, industrial electricity prices are much lower in other countries. In the US and India, rates are 6.3 cents per kWh, while China’s is 7.7 cents. Even Norway, a European market, enjoys rates as low as 4.7 cents per kWh. These price differences impact Pakistan’s export competitiveness.
The IEA report also points to challenges in Europe, where high electricity costs are accelerating de-industrialization. Manufacturers are relocating to regions with more affordable power, which could have implications for industries in Pakistan. The global rise in electricity demand, driven by industrial production and electrification, is expected to continue through 2027.
As global electricity consumption grows rapidly, China and India will account for most of the increase. This shift in energy demand underscores the growing role of electricity in total energy consumption, especially in China, where the adoption of electrification is surging.