ISLAMABAD:
Employees of state-owned enterprises (SOEs) and self-governing institutions operating under state patronage will face pay cuts of between five and 30 percent as part of government austerity, with the savings earmarked for public relief.
The decision was taken on Saturday at a meeting chaired by Prime Minister Shehbaz Sharif to review the impact of rising petroleum product prices and the implementation of austerity measures amid the ongoing crisis in the Middle East, according to a press release issued by the Prime Minister’s Office (PMO).
The move expands austerity measures announced earlier this week after the global oil crisis triggered by the US-Israel war against Iran pushed up fuel prices in Pakistan.
“It was decided at the meeting that, like state employees, the salaries of employees in state-owned enterprises and independent institutions under state patronage must be cut by 5-30 percent,” the statement states.
It added that any funds saved through the austerity measures would be used “only for public relief”.
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 earlier announced initiatives, the meeting decided that the four-day working week would not apply to Law Enforcement Agencies (LEA) and FBR, which would continue to function under normal schedules.
Participants also reviewed previous measures and reiterated that a third-party audit would be conducted within two months on the decisions to ground 60% of government vehicles and cut 50% of fuel allocations for official vehicles across departments.
“The meeting was also briefed on the implementation of the government’s complete ban on the purchase of new vehicles and the ban on all other public procurement,” the PMO statement added.
In addition, the next two months’ salaries of cabinet members, ministers, advisers and special assistants (SAPMs) will also be “used as public welfare savings”.
The meeting was further informed of the enforcement of a complete ban on foreign visits by ministers, advisers and SAPMs, with teleconferences and online meetings instead being prioritized.
“The complete ban on foreign visits by government officials, ministers, state ministers and special assistants will remain in place,” Prime Minister Shehbaz said.
The meeting also decided that companies and other institutions with government representatives on their boards would not charge participation fees for these representatives, as such amounts should be counted as savings.
“The premier also directed all Pakistani embassies around the world to observe the celebration of March 23 with utmost simplicity,” the statement added, referring to Pakistan Day.
According to the PMO, the prime minister also directed that “the secretaries concerned will implement and monitor all these austerity orders and measures and will submit a report to the audit committee on a daily basis”.
The government cuts come as the war between the US 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 triggered sharp increases in fuel prices.
Last week, the government raised petrol and high-speed diesel prices by Rs55 per litre, citing a rise in global oil prices. However, on Friday – when new prices were to be announced under the revised weekly price mechanism – Prime Minister Shehbaz decided to keep fuel prices unchanged despite the rise in the international oil market.
Petroleum 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 conducted a comprehensive review of petroleum product stock positions across the country and was briefed on the current national inventory of crude oil and refined petroleum products, ongoing import arrangements and supply chain logistics,” the ministry said.
Participants were also informed about cargoes currently under way as well as additional shipments being arranged to bolster national reserves.
“The committee noted with satisfaction that stocks of petroleum products remain at comfortable levels and that supply chains are functioning smoothly, with appropriate arrangements in place to ensure continuity of supply in the coming weeks,” the ministry said.
The meeting also reviewed developments in global oil markets, which have seen “increased volatility in recent days due to geopolitical developments in the region”.
“Members examined international price trends, benchmark crude oil movements and refined product market dynamics and discussed possible external scenarios and their potential implications for Pakistan’s energy sector and wider economy. It was noted that the government continues to closely monitor international market developments and conducts ongoing scenario planning to ensure domestic energy security and economic stability,” the ministry said.
Operational arrangements for crude oil imports, refinery operations and maritime logistics were also revised. The authorities briefed the committee on measures aimed at facilitating cargo movement, maintaining optimum refinery throughput and ensuring the uninterrupted functioning of the oil 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 nationwide fuel availability,” the ministry said.
Members were further briefed on the supply outlook for diesel, petrol, jet fuel and liquefied petroleum gas. The committee noted that current supply levels and planned imports were expected to adequately meet domestic demand in the coming weeks.
It added that the authorities remained actively engaged in monitoring stocks, shipment schedules and distribution networks to ensure uninterrupted supply.
In addition to supply-side measures, the committee also reviewed targeted fuel savings and demand management options aimed at moderating import requirements during periods of global price volatility.
“Various potential measures related to fuel efficiency and public conservation initiatives were discussed with the understanding that responsible consumption can help reduce pressure on imports while supporting broader economic stability,” it said.
The meeting also reviewed progress on strengthening monitoring mechanisms across the oil supply chain, including plans to develop a digital dashboard to provide real-time visibility of inventory levels, depots and retail supply conditions.
It was agreed that improved data integration and monitoring would improve oversight and support timely decision-making.
Finance Minister Aurangzeb said the government’s foremost priority remained to ensure uninterrupted availability of petroleum products across the country while minimizing the burden on the public.
“He 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 will continue to closely monitor developments in international energy markets, domestic equity 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, ensuring national energy security and ensuring uninterrupted supply chains amid the evolving global situation.
