ISLAMABAD:
Employees of state-owned enterprises and autonomous institutions operating under government patronage will face pay cuts ranging from five to 30 percent as part of the government’s austerity drive, with the savings earmarked for public assistance.
The decision was taken on Saturday during 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 crisis in the Middle East, according to a press release issued by the Prime Minister’s Office (PMO).
The move extends austerity measures announced earlier this week after the global oil crisis triggered by the U.S.-Israeli war with Iran sent fuel prices soaring in Pakistan.
“It was decided at the meeting that, as for government employees, there would be a reduction 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 any funds saved through austerity measures would be used “solely 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.
After reviewing the previously announced initiatives, the meeting decided that the four-day working week would not apply to law enforcement agencies (LEAs) and the FBR, which would continue to operate under normal timings.
Participants also reviewed previous measures, reiterating that an independent audit would be conducted within two months regarding decisions to ground 60% of government vehicles and reduce fuel allocations for official vehicles in all departments by 50%.
“The meeting was also briefed on the implementation of the government’s total ban on the purchase of new vehicles and 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 was further briefed on the implementation of a total ban on foreign visits by ministers, advisors and SAPMs, with teleconferences and online meetings to be prioritized.
“The complete ban on foreign visits by government officials, ministers, ministers of state and special assistants will remain in force,” Prime Minister Shehbaz said.
The meeting also decided that corporations and other institutions with government representatives on their boards would not charge participation fees to those representatives, with such amounts to be considered savings.
“The Prime Minister also directed all Pakistani embassies across the world to celebrate March 23 celebrations with utmost simplicity,” the statement added, referring to Pakistan Day.
According to the PMO, the Prime Minister also ordered that “concerned secretaries will implement and monitor all such austerity orders and measures and submit a report to the review committee on a daily basis.”
The government’s austerity policy comes as the war between the United States and Iran, which began two weeks ago, has had a dramatic impact on the global and domestic economies after the closure of the Strait of Hormuz triggered sharp increases in fuel prices.
Last week, the government increased prices of petrol and high-speed diesel by Rs 55 per liter, citing a surge in global oil prices. However, on Friday – as new prices were expected to be announced under the revised weekly pricing mechanism – Prime Minister Shehbaz decided to keep fuel prices unchanged despite the rise 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 undertook a comprehensive review of petroleum product stocks 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 briefed on shipments currently en route as well as additional shipments being organized to bolster national reserves.
“The committee noted with satisfaction that stocks of petroleum products remain at comfortable levels and that supply chains are operating smoothly, with adequate 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 experienced “increased volatility in recent days due to geopolitical developments in the region.”
“Members reviewed international price trends, crude benchmark movements and refined products market dynamics, and discussed possible external scenarios and their potential implications for Pakistan’s energy sector and the economy in general. It was noted that the government continues to closely monitor developments in the international market and undertakes continuous scenario planning to safeguard energy security and economic stability of the country,” the ministry said.
Operational arrangements for crude imports, refining operations and maritime logistics have also been reviewed. The authorities briefed the committee on measures to facilitate movement of goods, maintain optimal throughput of refineries and ensure uninterrupted functioning of the oil supply chain.
“The committee emphasized the importance of maintaining close coordination among refineries, oil marketing companies and relevant government institutions to maintain smooth product flows and fuel availability nationwide,” the ministry said.
Members were further briefed on the supply prospects of diesel, gasoline, aviation fuels and liquefied petroleum gas. The committee noted that current supply levels and forecast imports are expected to adequately meet domestic demand in the coming weeks.
He added that authorities remained actively engaged in monitoring inventory levels, shipping schedules and distribution networks to ensure uninterrupted supply.
Alongside supply-side measures, the committee also considered targeted fuel conservation and demand management options aimed at moderating import needs during periods of global price volatility.
“Various potential measures related to efficient fuel consumption and public sector conservation initiatives were discussed, with the understanding that responsible consumption can help reduce pressure on imports while supporting broader economic stability,” the statement said.
The meeting also reviewed progress made in strengthening monitoring mechanisms throughout the oil supply chain, including plans to develop a digital dashboard to provide real-time visibility of stock levels, depots and retail supply conditions.
It was agreed that better data integration and monitoring would improve monitoring and support rapid decision-making.
Finance Minister Aurangzeb said the government’s top priority remains 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 through 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, national stock situations and supply chain dynamics on a daily basis to ensure prompt policy responses.
He reiterated that the government remained fully committed to maintaining market stability, safeguarding national energy security and ensuring uninterrupted supply chains in an evolving global context.
