The study attempts to analyze the impact of energy pricing policies on consumers’ welfare in rural and urban Pakistan. The study is based on pooled data of Household Integrated Economic Survey (HIES) from year 1984-85 to 2011-12. The Almost Ideal demand system (AIDS) is employed for estimating the parameters and price elasticities. The welfare analysis shows that increase in prices of energy has been more than the increase in general consumer price index over the period. Therefore consumers have been incurring high expenditures in all the years from 1984 to 2011 and there has been a consistent welfare loss for all the consumers with a decreasing trend. Welfare loss to the consumers in rural Pakistan is more as compared to the welfare loss of consumers in urban Pakistan. Supervisor:-Prof. Dr. Eatzaz Ahmad