Pakistan tightens austerity measures as fuel prices surge

Written by

in

Islamabad shops will close by 9pm, while the government has cut official vehicle fuel allocations by 50% and restricted non-essential spending.

Pakistan’s federal government has introduced fresh austerity and fuel conservation measures as higher international oil prices put pressure on fuel costs, initially imposing new business closing hours in Islamabad and calling on provincial and regional administrations to consider similar steps.

Under the measures, shops, markets, shopping malls, bazaars and general retail outlets in Islamabad must close by 9pm. Marriage halls and marquees will close by 10pm, while restaurants, cafés and eateries must shut by 11pm, although takeaway and home delivery services are exempt.

The restrictions come after the government raised fuel prices, with petrol increasing by Rs6.88 per litre to Rs391.22, while high-speed diesel rose by Rs5.62 to Rs421.45 per litre from September 17.

Businesses Face New Closing Hours

The notification said marriage-related functions would be limited to serving a single dish.

Several essential services have been exempted from the closing-time restrictions. These include pharmacies, hospitals, clinics, medical laboratories, standalone bakeries, tandoors, milk and dairy shops, fuel and CNG stations, electric vehicle charging stations, gyms, sports facilities, IT companies and call centres.

The latest measures initially apply to Islamabad, while the federal government has encouraged provincial and regional authorities to consider implementing similar arrangements.

Government Cuts Fuel and Spending

As part of the broader austerity drive, official vehicle fuel allocations have been reduced by 50% for three months.

The reduction does not apply to operational vehicles of the Armed Forces, Civil Armed Forces, law enforcement agencies, essential services and the Federal Board of Revenue. However, administrative and non-operational formations remain subject to the cut.

The government has also prohibited the purchase of vehicles and durable goods by government departments, except for IT-related procurements. Development projects are exempt from the restrictions.

Non-essential recurring government expenditure is also being reduced by 5% during fiscal year 2026-27.

Foreign Travel Restricted

The notification also imposes a three-month ban on official foreign travel, including obligatory visits, with limited exceptions for scholarships offered by international development partners and training or courses arranged through the Economic Affairs Division or institutional agreements.

Where foreign travel is unavoidable, senior government officials and other designated functionaries must travel in economy class.

The government has further directed departments to hold meetings through teleconferencing where possible and prohibited official dinners except for visiting foreign delegations. Government-funded seminars, training programmes and conferences have also been restricted, with unavoidable events to be held at government venues.

The latest move follows earlier government discussions about reviving austerity measures as renewed Middle East tensions pushed up global oil prices and increased pressure on Pakistan’s fuel costs.