Pakistan has extended its austerity measures and fuel conservation efforts until June 13, 2026, as diplomatic tensions between the United States and Iran continue to loom over the region. This decision was confirmed by the Cabinet Division following Prime Minister Shehbaz Sharif’s approval, based on recommendations from the implementation committee.
The extension includes a 50% reduction in fuel supply for official vehicles, with 60% of these vehicles remaining off the roads. These measures are part of a broader austerity plan first announced by PM Shehbaz on March 9, following a significant increase in petrol and diesel prices by 20%.
The spike in fuel prices was attributed to disruptions in oil supply caused by the closure of the Strait of Hormuz, a strategic shipping route, by Iran. This closure was in response to joint military actions by the US and Israel, which concluded on April 8 after a ceasefire facilitated by Pakistan.
Despite the ceasefire, the US and Iran remain at an impasse over establishing a permanent resolution, particularly concerning their respective blockades of the Strait of Hormuz. PM Shehbaz emphasized Pakistan’s role in pursuing diplomatic avenues to ease the crisis during a televised address.
The austerity measures include a four-day workweek for government offices, a 20% reduction in non-essential expenditures, and a ban on non-obligatory foreign visits by officials. Additionally, up to 50% of government employees are to work from home on alternate days, with a shift towards virtual meetings to further cut costs. The banking sector and essential services are exempt from these measures.
Published in SouthAsianDesk, May 12, 2026
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