Pakistan weighs reinstating austerity rules as fuel prices surge amid Middle East conflict

At a joint briefing with IT minister Shaza Fatima Khawaja and petroleum minister Ali Pervaiz Malik, Information Minister Ataullah Tarar announced that the government is re-examining the austerity package introduced on March 9, which included a 50 percent cut to fuel allowances for official vehicles, salary reductions for legislators and a partial work-from-home policy. Most of those measures were lifted on June 19, except for market-timing rules, but rising petrol (Rs375.82 per litre) and diesel (Rs403.32 per litre) prices amid renewed US-Iran conflict have prompted a fresh review.

The cabinet, directed by Prime Minister Shehbaz Sharif, will decide soon which steps to reinstate. Meanwhile, a fuel relief scheme launched on Sunday offers a Rs100 per litre subsidy to motorcycles, rickshaws, Qingqis and vehicles up to 800 cc, with an estimated monthly cost of Rs25 billion. Deputy Prime Minister and Foreign Minister Ishaq Dar has been tasked with preventing transport fare hikes, and a steering committee of provincial chief secretaries will oversee implementation. Petroleum Minister Ali Pervaiz Malik said discussions with private refineries aim to secure supply through September-October and mitigate any disruption through Bab al-Mandab.