The federal government has introduced a series of austerity and fuel-saving measures, mandating their immediate enforcement. These include a 50 percent reduction in fuel allocations for most government vehicles, a three-month suspension on foreign travel for officials, procurement restrictions, and shortened business hours. These steps come as Pakistan faces escalating petroleum prices amid the intensifying Middle East crisis.

A Cabinet Division notification specifies that fuel allocations for administrative and non-operational government vehicles will be halved for three months. However, operational vehicles belonging to the armed forces, civil armed forces, law enforcement agencies, essential services, and the Federal Board of Revenue are exempt from this cut.

Additionally, the government plans to reduce the non-ERE budget for the fiscal year 2026-27 by 5 percent, affecting Pakistan’s missions abroad as well. Expenditures related to accommodation, education, and medical treatment remain untouched by these cuts.

The directive also enforces a total ban on acquiring new government vehicles and prohibits purchasing durable goods, except for IT equipment. These austerity measures are a response to the sharp surge in global oil prices following the escalation of conflicts in the Middle East, which have disrupted international energy supplies. Pakistan, heavily dependent on imported fuel, is particularly vulnerable to fluctuations in global petroleum markets.

On September 17, petrol prices were increased by Rs6.88 per litre to Rs391.22, while high-speed diesel rose by Rs5.62 to Rs421.45 per litre. The Oil and Gas Regulatory Authority attributed these hikes mainly to rising international petroleum prices and related market conditions.

In a significant development, the government has banned all foreign travel by ministers, advisers, and officials for three months. Exceptions are made for scholarships, training programs, and visits under institutional agreements. For essential international events, ambassadors or high commissioners will represent Pakistan when feasible. Officials required to travel abroad must do so in economy class. Furthermore, government meetings and consultations are encouraged to be held via teleconferencing to minimize travel-related expenses.

Official dinners are also prohibited except those for foreign delegations, and government-funded seminars, training sessions, and conferences have been banned. When unavoidable, such events must take place in government venues rather than commercial locations.

The austerity package extends restrictions on government purchases, including a complete ban on new vehicle acquisitions across all categories and a ban on durable goods purchases, excluding IT equipment. Requests for exemptions will be reviewed individually by a committee, with final approval resting with Prime Minister Shehbaz Sharif. Provincial and regional governments have been urged to adopt similar austerity and fuel-saving measures.

Business hours have been tightened under the new rules. Shops, markets, shopping malls, and general stores must close by 9pm. Marriage halls, marquees, and other event venues are required to close by 10pm, while restaurants, cafes, and food outlets must shut by 11pm. Takeaway and home-delivery services are exempt from these restrictions.

Essential services such as pharmacies, hospitals, clinics, medical laboratories, medical equipment shops, bakeries, tandoors, milk and dairy shops, petrol stations, and electric vehicle charging points will continue operating without restrictions. Gyms, sports facilities, IT companies, and call centers are also exempt.

As part of efforts to limit expenditure and conserve resources, the government has mandated that only a single dish be served at wedding functions.

These measures revive and expand upon austerity steps introduced earlier this year following the outbreak of the Middle East conflict and the resultant spike in global fuel prices. In March, Prime Minister Shehbaz Sharif announced fuel-saving initiatives including a 50 percent reduction in fuel allowances for official vehicles, grounding many government vehicles, curbing government purchases, and restricting foreign travel. The government also banned the use of high-octane fuel for official vehicles and grounded nearly 60 percent of government vehicles as part of cost-cutting efforts. Some of these measures were later eased, though market timing restrictions remained.

Information Minister Attaullah Tarar noted on September 14 that the government was considering reinstating austerity measures due to renewed tensions in the Middle East increasing international oil prices. The Cabinet Division’s website continues to list previous austerity and fuel conservation notifications, demonstrating the government’s ongoing administrative efforts to manage fuel consumption and public spending during energy market challenges.

The current austerity package coincides with government attempts to mitigate the domestic impact of the global energy shock while offering targeted relief to consumers. On September 13, the prime minister unveiled a fuel relief scheme providing a Rs100 per litre subsidy for motorcycles, rickshaws, Qingqi rickshaws, and other two- and three-wheelers for up to 20 litres monthly. Car owners with engines up to 800cc receive the same subsidy for up to 30 litres monthly. The Economic Coordination Committee approved Rs75 billion for this relief program, which is limited to non-commercial users and one vehicle per owner.

Thus, the government’s response to the oil crisis balances providing targeted consumer support with efforts to reduce fuel consumption and discretionary spending in the public sector. Pakistan’s vulnerability has heightened as disruptions in energy flows through the Gulf and the Strait of Hormuz drive up prices and complicate supplies regionally. Reports indicate that the escalating Gulf crisis is causing significant energy disruptions in Pakistan and other Asian countries, prompting efforts to secure costly energy supplies.

Consequently, the government aims to conserve fuel, curb non-essential expenditure, and limit official travel and procurement while continuing to offer relief to households most affected by rising petrol prices. The latest notification directs federal ministries, departments, and institutions to implement these measures immediately and encourages provincial and regional governments to adopt similar steps.