Pakistan has announced a fresh set of austerity measures to conserve fuel and reduce government spending as the wider Gulf conflict disrupts energy supplies and pushes up petrol and diesel prices.
Photo : AP
Pakistan has announced a new round of austerity measures as rising fuel prices and disruptions to energy supplies put additional pressure on the country. The measures, announced on Thursday, are aimed at conserving fuel while limiting government expenditure.
Under the new policy, fuel allocations for official vehicles will be reduced, while the government has also banned the purchase of vehicles and most other durable goods. IT procurement has been exempted from the restriction.
Foreign visits by government officials and official dinners have also been restricted. Authorities are encouraging the use of teleconferencing for meetings as part of the effort to reduce fuel consumption and spending.
The measures come as Pakistan faces the prospect of gas and electricity shortages. Disruptions to LNG supplies linked to the wider Gulf conflict have added to concerns over the country’s energy security, while petrol and diesel prices have risen.
Pakistan Had Announced Similar Steps In March
This is the second time this year that Pakistan has introduced broad austerity measures in response to energy and economic pressures. In March, the government temporarily closed schools for two weeks and introduced measures to reduce fuel consumption.
Those steps also encouraged more government employees to work from home. The objective was to conserve fuel while cutting government expenditure. The latest measures come as the impact of the regional conflict extends beyond oil markets. Pakistan is particularly exposed to disruptions in energy and maritime trade because of its dependence on imported fuel and LNG.
Fuel Subsidy For Motorcycles And Small Cars
Alongside the government austerity drive, Pakistan introduced a new fuel subsidy policy beginning Wednesday. Motorcycle, rickshaw and small-car owners are being offered a subsidy of 100 Pakistani rupees, or around 36 US cents, per litre subject to a monthly quota.
The measure is intended to cushion the impact of rising fuel prices on consumers. It comes as Islamabad simultaneously seeks to reduce fuel consumption across government operations.
The wider energy pressure has been linked to disruptions around key regional trade routes. Attacks by the US and Israel on Iran more than six months ago disrupted oil and gas exports through the Strait of Hormuz, while fighting between Saudi Arabia and the Iran-backed Houthis has created additional risks for trade through the Red Sea.
