Pakistan announces austerity measures amid severe fuel crisis

Pakistan’s government has taken several 'unprecedented' steps to save fuel and money amid a severe fuel crisis caused by the Mideast war.

These measures include reducing fuel allocations for government vehicles, halting the purchase of new vehicles for official use, suspending officials’ foreign travel and cancelling official dinners.

The austerity policy was announced in a government statement issued from the Pakistan Prime Minister’s Office on Thursday night.

The decisions taken in the statement are: fuel allocations for government vehicles will be reduced by 50 per cent for the next three months. For the 2026-27 fiscal year, other administrative expenses or budgets, excluding salaries of government officials and employees, have been cut by 5 per cent.

The purchase of all permanent or heavy goods, except in the information technology sector, has been completely banned. During this period, the government will also not purchase other movable or permanent items. All types of foreign travel will remain suspended for the next three months, except in cases of mandatory or scholarship-related travel.

In cases of absolutely essential foreign travel, ministers must purchase economy class or low-cost or ordinary class air tickets. To reduce fuel use and government expenditure, government officials have been instructed to rely on teleconferencing or online meetings where possible.

The government has directed that only 'one-course meals' be served to guests at any wedding ceremony or event across the country. To save fuel, shops across the country must close by 9pm.

Facing a severe fuel crisis, the Pakistan government had earlier taken similar austerity measures last March as well. At that time, the authority temporarily announced the closure of schools for two weeks. It also encouraged reduced fuel use and work from home at various offices.

Due to the ongoing crisis spreading across West Asia, the supply of liquefied natural gas (LNG) has been disrupted, creating intense pressure on Pakistan’s overall energy sector. Alongside this, the prices of petrol and diesel have also risen.

According to a Friday report by Pakistan's leading media outlet Dawn, although the price of petrol has decreased slightly in the country, the government has raised the price of diesel anew. On Thursday, the price of petrol was reduced by 0.43 rupees per litre, while the price of high-speed diesel was increased by 3.47 rupees per litre.

As a result, the new retail price of petrol in Pakistan stands at 390.79 rupees per litre, and the price of high-speed diesel has risen to 424.92 rupees per litre. Meanwhile, the government continues to collect 114 rupees per litre in duties and taxes on petrol and 100 rupees per litre on diesel.

Speaking about the new austerity policy on Thursday, Pakistan’s Minister for Climate Change, Musadik Malik, said, ‘The government is trying to protect consumers to some extent from the pressure of this price increase through a fuel relief package. Under the new policy effective from Wednesday, owners of motorcycles, rickshaws and small cars will receive a subsidy of 100 rupees per litre of fuel, subject to a fixed monthly quota.'