Pakistan has ordered a 50 percent cut in fuel allocations for government vehicles for three months and imposed restrictions on official travel and spending, as the widening Middle East conflict disrupts energy supplies and drives up petroleum prices, Hiru News reports, carrying an Arab News report.
The measures took effect immediately under a Cabinet Division notification dated 17 September, issued on the recommendation of the government’s Committee for Monitoring and Implementation of Fuel Conservation and Additional Austerity Measures.
What the package contains
The fuel cut exempts operational vehicles of the armed forces, civil armed forces, law enforcement agencies, essential services and the Federal Board of Revenue. Administrative and non-operational vehicles belonging to those same bodies remain subject to it. Development projects are exempt.
Alongside it, the government imposed:
- a complete ban on purchasing official vehicles and all durable goods, except information technology equipment;
- a 5 percent reduction in non-employee expenditure across the whole 2026-27 fiscal year, deducted monthly and applying also to Pakistan’s foreign missions and officials posted abroad, though rent, education fees and medical care are unaffected;
- a 9 p.m. closing time for markets, as Dawn reported, with laboratories, standalone bakeries and tandoors, dairy shops, fuel and CNG stations, electric vehicle charging points, gyms, sports facilities, IT companies and call centres exempt.
Provincial and regional governments may adopt similar measures. Exemption requests go to the monitoring committee case by case and then to the prime minister.
This is a revival, not a first
Islamabad first introduced emergency fuel-conservation measures on 9 March, after the US-Iran conflict disrupted supplies. It withdrew most of them on 20 June following a US-Iran agreement that pushed prices down, keeping only the restrictions on business closing times.
That history is worth stating plainly, because the March and September packages are close enough to be mistaken for one another — both carry the same 50 percent figure and the same three-month term. The March package also closed schools for two weeks and pushed a four-day week and remote working; this one does not.
The price pressure behind it
Petrol rose Rs. 6.88 to Rs. 391.22 a litre on Thursday and high-speed diesel Rs. 5.62 to Rs. 421.45 — the eighth consecutive increase. Brent crude has traded around $100 a barrel this week.
The pressure comes from disruption to shipping through the Strait of Hormuz and a growing threat to traffic through the Bab el-Mandeb, the route that has carried a rising share of Saudi exports.
The subsidy the dealers are refusing to administer
Days before the austerity notification, Pakistan approved a Rs. 75 billion (US$271 million) relief programme: a Rs. 100-per-litre petrol subsidy for motorcycle and three-wheeler owners on up to 20 litres a month, and for owners of cars up to 800cc on up to 30 litres a month.
It is not running as intended. The Pakistan Petroleum Dealers Association said on Wednesday its members would not participate under the existing mechanism, citing inadequate consultation and doubts about reimbursement. “There are around 14,000 dealers across the country, and from tonight, they will not sell petrol under the relief package,” vice chairman Tariq Hassan said. The government says the federal treasury bears the entire cost and that the State Bank of Pakistan will reimburse filling stations within 24 hours.
Why this reads across to Colombo
Pakistan’s Rs. 100-per-litre headline figure is the same number Sri Lanka used for its own diesel relief, which the IMF declined to endorse while pressing for cost-recovery pricing. Both economies import nearly all their fuel and both sit downstream of the same Hormuz disruption. The difference is that Colombo is operating under IMF prior actions and Islamabad is not — and that Pakistan has paired its subsidy with a compulsory cut in state consumption, which Sri Lanka has not done.
Not reported
Neither account gives the fiscal cost of the fuel-allocation cut or estimates the volume saved, and neither says how compliance will be monitored. Neither says how many motorists have drawn the subsidy since it opened, or what happens to it if the dealers’ boycott holds.
