Employees of state-owned enterprises (SOEs) and autonomous institutions operating under government patronage will face salary cuts ranging from five to 30 per cent as part of the government’s austerity drive, with the savings earmarked for public relief.

The decision was taken on Saturday at a meeting chaired by Prime Minister Shehbaz Sharif to review the impact of rising petroleum product prices and the implementation of austerity measures amid the ongoing Middle East crisis, according to a press release issued by the Prime Minister’s Office (PMO).

The move expands the belt-tightening measures announced earlier this week after the global oil crisis triggered by the US-Israel war on Iran pushed up fuel prices in Pakistan.

“It was decided in the meeting that, like government employees, there will be a 5-30pc cut in the salaries of employees of state-owned enterprises and autonomous institutions under government patronage,” the statement said.

It added that all funds saved through the austerity measures would be used “only for public relief”.

The meeting was attended by Finance Minister Muhammad Aurangzeb, Petroleum Minister Ali Pervaiz Malik, Information Minister Attaullah Tarar, Minister of State for Finance Bilal Azhar Kayani and other senior officials, while Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial was also present.

While reviewing previously announced initiatives, the meeting decided that the four-day work week would not apply to law enforcement agencies (LEAs) and the FBR, which would continue to operate under normal schedules.

The participants also reviewed earlier measures, reiterating that a third-party audit would be conducted within two months regarding the decisions to ground 60% of government vehicles and cut 50% of fuel allocations for official vehicles across departments.

“The meeting was also briefed on the implementation of the government’s complete ban on the purchase of new vehicles and the ban on all other government purchases,” the PMO statement added.

In addition, the next two months’ salaries of cabinet members, ministers, advisers and special assistants (SAPMs) will also be “used as savings for public welfare”.

The meeting was further informed about the enforcement of a complete ban on foreign visits by ministers, advisers and SAPMs, with teleconferencing and online meetings to be prioritised instead.

“The complete ban on foreign visits of government officers, ministers, ministers of state and special assistants will remain in place,” PM Shehbaz was quoted as saying.

The meeting also decided that corporations and other institutions with government representatives on their boards would not charge participation fees for those representatives, with such amounts to be counted as savings.

“The premier also directed all Pakistani embassies around the world to celebrate the celebrations of March 23 with utmost simplicity,” the statement added, referring to Pakistan Day.

According to the PMO, the prime minister also directed that “the concerned secretaries will implement and monitor all these austerity orders and measures and will submit a report to the review committee on a daily basis”.

The government’s austerity push comes as the US-Iran war, which began two weeks ago, has had a dramatic impact on global and domestic economies after the closure of the Strait of Hormuz triggered sharp increases in fuel prices.

Last week, the government raised petrol and high-speed diesel prices by Rs55 per litre, citing a surge in global oil prices. However, on Friday – when new prices were due to be announced under the revised weekly pricing mechanism – PM Shehbaz decided to keep fuel prices unchanged despite the uptick in the international oil market.

Petroleum supply review

Meanwhile, a committee formed by the prime minister to monitor petroleum prices held a virtual meeting to assess the country’s fuel supply situation. According to the Ministry of Finance, the session was chaired by Finance Minister Muhammad Aurangzeb.

“The committee undertook a comprehensive review of petroleum product stock positions across the country and was briefed on the current national inventory of crude oil and refined petroleum products, ongoing import arrangements, and supply chain logistics,” the ministry said.

Participants were also informed about cargoes currently en route as well as additional shipments being arranged to strengthen national reserves.

“The committee noted with satisfaction that petroleum product stocks remain at comfortable levels and that supply chains are functioning smoothly, with adequate arrangements in place to ensure continuity of supply in the coming weeks,” the ministry said.

The meeting also reviewed developments in global oil markets, which have seen “heightened volatility in recent days due to geopolitical developments in the region”.

“Members examined international price trends, benchmark crude movements, and refined product market dynamics, and discussed possible external scenarios and their potential implications for Pakistan’s energy sector and broader economy. It was noted that the government continues to closely monitor international market developments and is undertaking continuous scenario planning to safeguard domestic energy security and economic stability,” the ministry said.

Operational arrangements for crude imports, refinery operations and maritime logistics were also reviewed. Authorities briefed the committee on measures aimed at facilitating cargo movements, maintaining optimal refinery throughput and ensuring the uninterrupted functioning of the petroleum supply chain.

“The committee emphasised the importance of maintaining close coordination among refineries, oil marketing companies, and relevant government institutions to sustain smooth product flows and nationwide fuel availability,” the ministry said.

Members were further briefed on the supply outlook for diesel, petrol, aviation fuels and liquified petroleum gas. The committee noted that current supply levels and planned imports were expected to adequately meet domestic demand in the coming weeks.

It added that authorities remained actively engaged in monitoring stock levels, shipment schedules and distribution networks to ensure uninterrupted supply.

Alongside supply-side measures, the committee also reviewed targeted fuel conservation and demand management options aimed at moderating import requirements during periods of global price volatility.

“Various potential measures relating to efficient fuel consumption and public sector conservation initiatives were discussed, with the understanding that responsible consumption can contribute to reducing pressure on imports while supporting broader economic stability,” it said.

The meeting also reviewed progress on strengthening monitoring mechanisms across the petroleum supply chain, including plans to develop a digital dashboard to provide real-time visibility of stock levels, depots and retail supply conditions.

It was agreed that improved data integration and monitoring would enhance oversight and support timely decision-making.

Finance Minister Aurangzeb said the government’s foremost priority remained ensuring the uninterrupted availability of petroleum products across the country while minimising the burden on the public.

“He noted that although global energy markets are currently experiencing significant volatility, Pakistan’s supply position remains stable due to proactive planning and close coordination among relevant stakeholders,” the ministry said.

Aurangzeb added that the committee would continue to closely monitor developments in international energy markets, domestic stock positions and supply chain dynamics on a daily basis to ensure timely policy responses.

He reiterated that the government remained fully committed to maintaining market stability, safeguarding national energy security and ensuring uninterrupted supply chains amid the evolving global situation.