ISLAMABAD: The federal government has announced a fresh package of austerity and fuel-conservation measures, ordering their immediate implementation as Pakistan faces mounting pressure from higher international oil prices amid the worsening Middle East crisis.
Under a notification issued by the Cabinet Division, fuel allocations for administrative and non-operational government vehicles will be reduced by 50 per cent for three months.
Operational vehicles of the armed forces, civil armed forces, law enforcement agencies, essential services and the Federal Board of Revenue have been exempted from the fuel reduction.
The government has also ordered a 5pc reduction in the non-ERE budget for the fiscal year 2026-27. The reduction will also apply to Pakistan’s missions abroad, although expenditure on accommodation, education and medical treatment has been exempted.
The notification imposes a complete ban on the purchase of new government vehicles of all types and prohibits the procurement of durable goods, with IT equipment exempted.
The latest measures come as international oil prices have risen sharply following the escalation of hostilities in the Middle East and disruptions to global energy supplies. Pakistan, which depends heavily on imported fuel, remains exposed to fluctuations in international petroleum prices.
The government raised the price of petrol by Rs6.88 per litre and high-speed diesel by Rs5.62 on Wednesday, taking their prices to Rs391.22 and Rs421.45 per litre respectively from September 17. The Oil and Gas Regulatory Authority attributed the increase primarily to higher international petroleum prices and related market factors.
Three-month ban on foreign travel
The government has imposed a three-month ban on foreign travel by ministers, advisers and government officials.
Exemptions have been provided for scholarships, training courses and visits covered by institutional agreements.
For essential and important international events, Pakistan’s ambassadors or high commissioners will represent the country where possible.
Where foreign travel by ministers or officials is considered unavoidable, they will be required to travel in economy class.
The government has also directed ministries and departments to conduct meetings and consultations preferably through teleconferencing to reduce expenditure on travel and related arrangements.
Official dinners have also been prohibited, except those hosted for foreign delegations.
Similarly, seminars, training programmes and conferences funded from the public exchequer have been prohibited. Where such programmes are unavoidable, ministries and departments have been directed to use government auditoriums, committee rooms and other official premises instead of commercial venues.
Restrictions on government purchases
The austerity package places a complete ban on the purchase of new government vehicles, regardless of category.
The government has also prohibited the purchase of durable goods, with IT-related purchases exempted.
Requests for exemptions from the austerity measures will be considered on a case-by-case basis. A committee will examine such requests and submit its recommendations to Prime Minister Shehbaz Sharif for approval.
The federal government has also asked provincial and regional administrations to consider adopting similar austerity and fuel-conservation measures.
Business hours tightened
The notification retains restrictions on commercial operating hours, requiring shops, markets, shopping malls and general stores to close by 9pm.
Marriage halls, marquees and other commercial venues hosting events will be required to close by 10pm, while restaurants, cafes and food outlets will close by 11pm.
Takeaway and home-delivery services have been exempted from the prescribed timings.
Several essential services will also remain exempt, including pharmacies, hospitals, clinics, medical laboratories, medical equipment shops, bakeries, tandoors, milk and dairy shops, petrol pumps and electric-vehicle charging stations.
Gyms, sports facilities, IT companies and call centres have also been exempted.
The government has separately ordered that only a single dish be served at wedding functions as part of efforts to reduce expenditure and conserve resources.
Earlier austerity drive revived
The latest measures revive and expand austerity steps introduced earlier this year following the outbreak of the Middle East conflict and a sharp increase in global fuel prices.
Prime Minister Shehbaz had announced fuel-conservation measures in March, including a 50pc reduction in fuel allowances for official vehicles, grounding of a large proportion of government vehicles, restrictions on government purchases and curbs on foreign travel.
The government had also imposed a ban on high-octane fuel for official vehicles and said nearly 60pc of government vehicles had been grounded as part of the cost-cutting drive.
Some of those measures were subsequently relaxed, while restrictions on market timings remained in place.
Information Minister Attaullah Tarar said on September 14 that the government was considering reviving the austerity measures as renewed hostilities in the Middle East put fresh pressure on international oil prices.
Oil shock intensifies pressure
The latest austerity package comes as the government attempts to contain the domestic impact of the international energy shock while providing targeted relief to consumers.
On September 13, Shehbaz announced a fuel relief scheme offering a subsidy of Rs100 per litre for motorcycles, rickshaws, Qingqi rickshaws and other two- and three-wheelers on up to 20 litres a month. Owners of cars with engines up to 800cc would receive the same relief on up to 30 litres a month.
The Economic Coordination Committee subsequently approved Rs75 billion for the relief scheme, which is restricted to non-commercial users and limited to one vehicle per owner.
The relief programme and the new austerity package form two parts of the government’s response to higher fuel prices, combining targeted assistance for some consumers with measures aimed at reducing fuel consumption and discretionary public spending.
The government has also expressed concern over disruptions to energy flows through the Gulf and the Strait of Hormuz, which have contributed to higher international energy prices and complicated supplies across the region.
The latest notification directs federal ministries, departments and institutions to implement the measures immediately and calls on provincial and regional governments to consider adopting similar steps.
