Fuel Cuts, Vehicles, Foreign Trips: Pak's Austerity Push As Economy Falters

Pakistan on Thursday announced a slew of austerity measures for the second time this year to conserve energy amid a fresh escalation of hostilities in the Middle East. The measures, which have been approved by the Pakistani cabinet, are set to remain in effect for three months.

Earlier this week, the Pakistani government raised the price of petrol by PkR 4.10 per litre and high-speed diesel by PkR 6.41 per litre, taking them to PkR 384.34 and PkR 415.83 per litre, respectively.

The hike was announced alongside official warnings over potential disruptions to oil supplies due to the deteriorating security situation around the Hormuz and Bab-el-Mandeb straits, with global crude prices also pushed up by attacks on Saudi energy infrastructure, including a strike on Riyadh's East-West pipeline.

What Are These Austerity Measures

To reduce the impact of rising petroleum prices, Pakistan has ordered a cut in fuel for official vehicles, bans on vehicle purchases by the state, foreign visits by officials, and official dinners, except those hosted for foreign visitors and delegations.

Apart from this, the austerity measures also include a ban on government purchase of all durable goods except IT procurement and a switch to teleconferencing for meetings.

Markets will be required to close at 9pm, wedding halls at 10pm and restaurants at 11pm. Drug stores and medical laboratories will be exempted from the restrictions.

The earlier round of measures were withdrawn in June after the two sides started peace talks.

While these restrictions are presently confined to Islamabad, the federal government is encouraging provincial and regional administrations to implement matching policies.

Pakistan's Energy Minister Awais Leghari and Climate Change Minister Musadik Malik, at a press conference on Tuesday, highlighted how skyrocketing prices on the international oil market were testing the government's ability to absorb such price shocks.

The government is also under pressure due to fear of popular protest championed by the right-wing Jamaat-i-Islami (JI) party, which has threatened countrywide demonstrations next week if the prices are not reduced.

(With inputs from agencies)