Pakistan extends austerity drive until June 13 amid Middle East tensions
Why this matters: local context for readers following news across Pakistan and the region.
The federal government has extended its nationwide austerity drive until June 13, amid ongoing uncertainty linked to the Middle East situation. According to an official notification issued by the Cabinet Division on Monday, the extension was approved by Prime Minister Shehbaz Sharif on the recommendations of the implementation committee. Under the directive, government departments will continue operating with a 50% cut in fuel allocation for official vehicles. In addition, 60% of the official fleet will remain off the roads as part of efforts to curb public expenditure. The austerity drive was originally launched by PM Shehbaz on March 9 in a televised address, shortly after a 20% increase in petrol and diesel prices. The austerity package applies across federal institutions, including ministries, autonomous bodies, state-owned enterprises, the legislature, defence organisations, and the judiciary. Alongside fuel restrictions, government offices are operating on a reduced four-day workweek, while essential services and banking operations remain exempt. Departments have also been instructed to cut non-essential spending by 20% in the final quarter of the fiscal year. The policy further restricts official foreign travel for ministers, lawmakers, and bureaucrats, allowing only essential trips. Additionally, up to half of government employees are assigned work-from-home schedules on alternate days where applicable. Other cost-cutting steps include mandatory economy-class travel for officials and a shift toward virtual meetings instead of in-person gatherings to reduce expenses. Fuel costs had surged in the country following disruptions in global oil supplies linked to tensions over the Strait of Hormuz, a key international energy route. The passage was closed during earlier regional hostilities involving Iran, the United States, and Israel, which later ended with a Pakistan-facilitated ceasefire. Although the ceasefire remains in place, differences persist over long-ter