Islamabad: The government of Shehbaz Sharif has approved salary cuts of 5% to 30% for employees working in state-owned enterprises (SOEs) and autonomous institutions as Pakistan struggles with a worsening fuel crisis.
According to reports from Press Trust of India, the decision was taken during a high-level meeting chaired by Prime Minister Sharif to review the impact of rising fuel prices and to introduce austerity measures aimed at reducing government expenditure.
The Prime Minister’s Office said the pay cuts would apply to staff in government-owned companies and institutions operating under state patronage, similar to measures already imposed on government employees. Officials said the savings generated from the reductions would be directed toward public welfare and relief programs.
The crisis comes as regional tensions linked to the conflict involving Iran, the United States, and Israel disrupt energy supply chains, worsening Pakistan’s fuel shortage.
As part of the broader austerity plan, the government has also announced several additional steps:
- 50% reduction in fuel allocation for government vehicles, with third-party audits to monitor compliance.
- 60% of government vehicles to be taken off the roads within the next two months.
- A complete ban on the purchase of new government vehicles and restrictions on other public procurement.
- Two months’ salary of cabinet members, ministers, advisers, and special assistants to be redirected toward public welfare funds.
- A continued ban on foreign travel by ministers and senior government officials.
The measures follow a sharp increase of 55 Pakistani rupees per liter in petrol prices announced last week, which prompted the government to introduce strict steps to reduce fuel consumption.
Analysts say the move highlights the growing economic pressure on Pakistan, as the country attempts to manage rising energy costs while maintaining fiscal stability during a period of regional geopolitical tension.