ISLAMABAD:
Employees of state-owned enterprises and autonomous institutions operating under government sponsorship will face pay cuts ranging from five to 30 percent as part of the government’s austerity drive, with savings going to public aid.
The decision was taken on Saturday at a meeting chaired by Prime Minister Shehbaz Sharif to review the impact of rising prices of petroleum products and implementation of austerity measures amid the ongoing Middle East crisis, according to a press release issued by the Prime Minister’s Office (PMO).
The move expands on belt-tightening measures announced earlier this week after the global oil crisis sparked by the US-Israel war against Iran drove up fuel prices in Pakistan.
“At the meeting it was decided that, like government employees, there will be a cut of 5 to 30 percent in the salaries of employees of state-owned enterprises and autonomous institutions under the patronage of the government,” the statement said.
He added that all funds saved through austerity measures would be used “only for public aid.”
The meeting was attended by Finance Minister Muhammad Aurangzeb, Petroleum Minister Ali Pervaiz Malik, Information Minister Attaullah Tarar, Minister of State for Finance Bilal Azhar Kayani and other senior officials, while Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial was also present.
While reviewing the previously announced initiatives, the meeting decided that the four-day work week would not apply to law enforcement agencies (LEAs) and the FBR, which would continue to operate as per normal schedules.
Participants also reviewed previous measures, reiterating that a third-party audit would be carried out within two months regarding decisions to ground 60% of government vehicles and cut 50% of fuel allocations for official vehicles across departments.
“The meeting also briefed on the implementation of the government’s total ban on the purchase of new vehicles and the ban on all other government purchases,” the PMO statement added.
In addition, the next two months’ salaries of cabinet members, ministers, advisors and special assistants (SAPMs) will also be “used as savings for public welfare.”
The meeting also reported on the implementation of a total ban on foreign visits by ministers, advisors and SAPM, giving priority to teleconferences and online meetings.
“Complete ban on foreign visits by government officials, ministers, ministers of state and special assistants will remain in place,” Prime Minister Shehbaz said.
The meeting also decided that corporations and other institutions with government representatives on their boards of directors would not charge participation fees to those representatives, and such amounts would be counted as savings.
“The Prime Minister also directed all Pakistani embassies across the world to observe March 23 celebrations with utmost simplicity,” the statement added, referring to Pakistan Day.
According to the PMO, the prime minister also directed that “the concerned secretaries will implement and monitor all these austerity orders and measures and submit a daily report to the review committee.”
The government’s austerity initiative comes as the war between the United States and Iran, which began two weeks ago, has had a dramatic impact on global and domestic economies after the closure of the Strait of Hormuz caused sharp increases in fuel prices.
Last week, the government increased prices of petrol and high-speed diesel by Rs 55 per litre, citing a rise in global oil prices. However, on Friday, when new prices were to be announced under the revised weekly pricing mechanism, Chief Minister Shehbaz decided to keep fuel prices unchanged despite the rally in the international oil market.
Oil supply review
Meanwhile, a committee formed by the prime minister to monitor oil prices held a virtual meeting to assess the country’s fuel supply situation. According to the Finance Ministry, the session was chaired by Finance Minister Muhammad Aurangzeb.
“The committee carried out a comprehensive review of stocks of petroleum products across the country and was briefed on the current national inventory of crude oil and refined petroleum products, ongoing import agreements and supply chain logistics,” the ministry said.
Participants were also briefed on shipments currently en route, as well as additional shipments being organized to strengthen national reserves.
“The committee noted with satisfaction that stocks of petroleum products remain at comfortable levels and that supply chains are functioning smoothly, with adequate arrangements in place to ensure continuity of supply in the coming weeks,” the ministry said.
The meeting also reviewed the evolution of global oil markets, which have experienced “increased volatility in recent days due to geopolitical events in the region.”
“Members examined international price trends, benchmark crude oil movements and refined products market dynamics, and discussed possible external scenarios and their possible implications for Pakistan’s energy sector and the broader economy. It was noted that the government continues to closely monitor international market developments and is carrying out continuous scenario planning to safeguard national energy security and economic stability,” the ministry said.
Operational arrangements for crude oil imports, refinery operations and maritime logistics were also reviewed. The authorities briefed the committee on measures aimed at facilitating cargo movements, maintaining optimal performance of the refinery and ensuring uninterrupted functioning of the petroleum supply chain.
“The committee emphasized the importance of maintaining close coordination between refineries, oil marketing companies and relevant government institutions to maintain smooth product flows and fuel availability across the country,” the ministry said.
Members were also briefed on the supply prospects for diesel, gasoline, aviation fuels and liquefied petroleum gas. The committee noted that current supply levels and anticipated imports were expected to adequately meet domestic demand in the coming weeks.
It added that authorities remained actively involved in monitoring stock levels, shipping schedules and distribution networks to ensure uninterrupted supply.
In addition to supply-side measures, the committee also reviewed specific fuel conservation and demand management options aimed at moderating import requirements during periods of global price volatility.
“Several potential measures related to fuel efficiency and public sector conservation initiatives were discussed, with the understanding that responsible consumption can contribute to reducing pressure on imports while supporting broader economic stability,” he said.
The meeting also reviewed progress in strengthening monitoring mechanisms across the petroleum supply chain, including plans to develop a digital dashboard to provide real-time visibility into stock levels, warehouses and retail supply conditions.
It was agreed that better data integration and monitoring would improve oversight and support timely decision-making.
Finance Minister Aurangzeb said the government’s top priority remained to ensure uninterrupted availability of petroleum products across the country while minimizing the burden on the public.
“It noted that although global energy markets are currently experiencing significant volatility, Pakistan’s supply position remains stable due to proactive planning and close coordination among relevant stakeholders,” the ministry said.
Aurangzeb added that the committee would continue to closely monitor developments in international energy markets, domestic stock positions and supply chain dynamics on a daily basis to ensure timely policy responses.
He reiterated that the government remained fully committed to maintaining market stability, safeguarding national energy security and ensuring uninterrupted supply chains amid the evolving global situation.
