Pakistan Cuts Official Fuel by 50% Under New Austerity Measures

ISLAMABAD: The federal government has introduced a new package of austerity and fuel-conservation measures, ordering a 50% reduction in fuel allocations for most official vehicles and imposing wider restrictions on government spending. The measures took effect immediately and several of the key restrictions will remain in force for three months.

Under the Cabinet Division notification, fuel supplied for official vehicles will be cut by half. Operational vehicles used by the armed forces, civil armed forces, law-enforcement agencies, essential services and the Federal Board of Revenue are exempt under specified conditions. The restriction will still apply to administrative and non-operational vehicles, while development projects have also been excluded from the fuel reduction.

The government has simultaneously ordered a 5% monthly reduction in non-employee-related expenditure during the current financial year. The measure extends to foreign missions and officials posted abroad, although essential obligations including accommodation, education fees and medical expenses will continue to be met. Development projects are exempt from this spending reduction as well.

A complete ban has also been placed on the purchase of government vehicles and most durable goods. Information technology equipment and purchases linked to development projects are excluded from that prohibition. Officials have further been directed to limit spending on government-funded events, meetings, seminars and training programmes, with greater use of teleconferencing encouraged where practical.

Foreign official travel has been suspended for three months, with limited exceptions for scholarships, training arranged through approved government channels and programmes covered by institutional agreements. Where overseas representation is considered necessary, Pakistani ambassadors or high commissioners are expected to represent the country. Officials permitted to travel in unavoidable circumstances will be required to use economy class.

The notification also retains previously announced operating-hour restrictions for businesses. Shops, malls, bazaars and grocery stores are required to close by 9pm, while marriage halls and marquees must close by 10pm. Restaurants and cafes may operate until 11pm, although takeaway and delivery services are exempt. Hospitals, pharmacies, medical laboratories, fuel stations, bakeries, dairy outlets, gyms, sports facilities, information technology firms and call centres are among the categories excluded from fixed closing hours.

The measures come as Pakistan attempts to contain government expenditure and conserve fuel amid elevated energy costs and continuing uncertainty in international oil markets. Reducing official fuel consumption and discretionary expenditure could lower some immediate pressure on public finances, although the overall fiscal impact will depend on enforcement across ministries and departments.

A monitoring committee will consider requests for exemptions on a case-by-case basis before forwarding recommendations for approval. Provincial and regional administrations have also been advised to consider similar conservation measures, meaning additional restrictions could follow outside the federal government if local authorities decide to adopt comparable policies.