Pakistan’s industrial sector is paying almost twice the electricity costs compared to China, India, and the United States, putting its export competitiveness at a disadvantage.
A report by the International Energy Agency (IEA) shows that power tariffs for energy-intensive industries in Pakistan averaged 13.5 cents per kilowatt-hour (kWh) in 2024, surpassing those in major economies and even exceeding rates in the European Union.
The Electricity 2025 — Analysis & Forecast to 2027 report by the Paris-based IEA states that industrial electricity prices in 2024 stood at 6.3 cents per kWh in both the US and India, 7.7 cents in China, and 11.5 cents in the EU. In Norway, a key European market, rates were as low as 4.7 cents per kWh.
Although Pakistan is not covered in the report due to its non-member status in the IEA, the data highlights how higher energy costs challenge industries operating within the country and exporting abroad.
The report also discusses Europe’s industrial struggles due to energy costs, stating that de-industrialization is accelerating as manufacturers relocate to regions with cheaper electricity.
“High electricity prices continue to undermine the competitiveness of European energy-intensive industries,” the report noted, adding that the EU’s average power tariff for industries was still 65 percent higher in 2024 than in 2019, despite a modest 5 percent decline from the previous year.
According to the IEA, global electricity demand is rising rapidly, with consumption expected to grow at an annual rate of nearly 4 percent through 2027.
In 2024 alone, demand increased by 4.3 percent, driven by industrial production, air conditioning use, electrification, and data center expansion. Over the next three years, total global electricity consumption is forecast to increase by 3,500 terawatt-hours (TWh), equivalent to adding Japan’s entire annual energy consumption each year.
China and India will account for most of this surge. In 2024, China’s electricity demand grew by 7 percent, a trend expected to continue at an average annual rate of 6 percent through 2027. India’s electricity demand is projected to rise even faster at 6.3 percent annually, exceeding its long-term growth average of 5 percent from 2015 to 2024.
