We examine the impact of energy prices on inflation at aggregate and disaggregate level in Pakistan. The time span of the research is 2001:7-2011:7. The results suggest that energy prices have a significant influence upon inflation. The strongest influence on inflation comes from change in electricity prices followed by diesel, petrol and gas. The impact of change in kerosene prices on inflation is positive but statistically insignificant. This could be due to relative smaller share of the kerosene in the aggregate consumption basket Supervisor:- Dr. Idrees Khawaja