Energy plays a very important role for achieving desired economic growth. It is the main input for economic development. Energy is found to be an important input in the production process like capital and labor. It increases the output of the economy and hence GDP. Studies have shown that energy consumption is positively correlated with economic growth where, for example, countries who have high GDP per capita also seen to have higher per capita energy consumption (Samoilidis & Mitrolopulos, 1984 and Leach & Gowen, 1987). Electric energy is found to be at the top of energy hierarchy, it has innumerable uses in homes, offices, industries, transport and agriculture etc. The demand for energy has been rapidly increasing. In this era of rapid globalization, the demand for energy is rising so much that energy problem will be one of the biggest problems of this century. In the production process we ignore the importance of energy which is as important as other factor of production like labor and capital, energy especially in the form of electricity plays a vital role and its consumption is increasing rapidly. The demand for energy is increasing rapidly and hence to meet this rising demand issue, supply of energy needs to be increased accordingly. The energy supplies can be extended or increased by planned management of available resources and energy conservation. The household decisions and business decisions both are crucial in regarding with the use of energy and it has an important implication for the economic development of the country. Supervisor:- Dr. Usman Mustafa