PM announces cuts to fuel use, govt spending

ISLAMABAD: Prime Minister Shehbaz Sharif on Thursday ordered sweeping cuts to government spending and fuel use, launching a nationwide austerity drive as Middle East tensions push global oil prices and inflation higher.

The meeting, chaired by the prime minister, also approved a five percent cut to the non-ERE budget for FY2026-27.

It banned the purchase of new government vehicles and froze procurement of durable goods other than IT equipment.

The prime minister said sacrifice must begin with the government and the elite, adding that a fuel subsidy for low and middle-income groups had already been introduced, with motorcycles, rickshaws and 800cc vehicles receiving Rs100 per litre in relief.

READ MORE: PM Shehbaz announces Rs100 per litre fuel relief for bikes, rickshaws, small cars

He directed all relevant institutions to cut unnecessary expenditure, use national resources prudently, and ensure swift implementation of the new measures.

Under the plan, fuel allocation for government vehicles was cut by 50 percent for three months. Ambulances, fire brigades, law enforcement and other essential services were exempted, though the exemption did not extend to administrative or non-operational vehicles.

Official visits and foreign travel were similarly banned for three months; where travel abroad is unavoidable, ministers, advisers, ministers of state, special assistants and government officials will be required to fly economy class.

To cut costs further, the meeting decided to expand the use of video and teleconferencing for official business and barred official dinners except those necessary for foreign delegations.

Government seminars, training programmes and conferences will avoid unnecessary spending, while the single-dish policy at weddings and other functions will continue.

Separately, new business-hour restrictions were announced: shops, markets, malls and bazaars must close by 9pm, marriage halls and event venues by 10pm, and restaurants, cafes and standalone fruit and vegetable shops by 11pm.

Pharmacies, hospitals, bakeries, fuel stations, EV charging points, gyms, sports facilities, IT firms and call centres were exempted.

The prime minister was told a monitoring committee would collect compliance reports from ministries, divisions, departments, state institutions and provincial governments, flag lapses, recommend corrective steps and submit weekly progress reports to him.

The prime minister directed that the measures be implemented without discrimination, alongside all possible steps to conserve energy and fuel.

The government also approved the continuation of austerity measures already in place for FY2026-27, which will now extend to attached departments, state-owned enterprises, statutory bodies and regulatory authorities.

Deputy Prime Minister and Foreign Minister Ishaq Dar, Minister for Petroleum Ali Pervaiz Malik, Information Minister Attaullah Tarar, and senior officials attended the meeting.

Meanwhile, on the orders of the prime minister, registration for Prime’s fuel subsidy scheme has been made free of cost.

A statement issued by the Prime Minister’s Office said the subsidy, available to owners of motorcycles, rickshaws and vehicles up to 800cc, is being extended nationwide, including in Azad Jammu and Kashmir and Gilgit-Baltistan, on the prime minister’s directions.

To register, applicants must send a free SMS to 9771 in the format: REG, followed by a space, their CNIC number, vehicle registration number, the first letter of the registering province, and the vehicle’s registration date.

Full details are available on www.pmfuelrelief.pk.

Copyright Business Recorder, 2026