Islamabad, March 14, 2026: Prime Minister Shehbaz Sharif has approved salary deductions ranging from 5% to 30% for employees of state-owned enterprises (SOEs) and autonomous institutions as part of a broader austerity drive aimed at mitigating the economic impact of the ongoing Middle East conflict.
According to an official statement issued by the Prime Minister’s Office, Sharif chaired a high-level meeting on Saturday to review the impact of fuel price fluctuations and the implementation of government austerity measures.
The meeting comes days after the government announced a wide-ranging cost-saving plan to address the global fuel crisis triggered by the ongoing conflict involving the United States, Israel and Iran.
Officials briefed the meeting that a third-party audit will oversee a 50% reduction in fuel allocations for government vehicles, while 60% of official vehicles will remain off the roads for the next two months.
The meeting also decided that government representatives serving on the boards of corporations and institutions will no longer receive participation fees, with the amount redirected to the government’s savings pool.
Simpler March 23 celebrations
The prime minister also directed Pakistani missions abroad to observe the Pakistan Day on March 23 with simplicity.
The meeting was informed that for the next two months, the salaries of cabinet members, ministers, advisers and special assistants would be allocated for public relief efforts. A complete ban on foreign visits by government officials, ministers of state and special assistants will also remain in place during this period.
All funds generated through the austerity measures will be used to support the public, the statement said.
Sharif directed relevant secretaries to ensure the implementation of the measures and submit daily progress reports to the review committee.
The government clarified that the proposed four-day workweek will not apply to law enforcement agencies or the Federal Board of Revenue, which will continue normal operations.
Key austerity steps
Among the key measures announced earlier:
- Fuel allocations for official vehicles reduced by 50% for two months.
- 60% of government vehicles in federal and provincial departments taken off the roads.
- Cabinet ministers, ministers of state, advisers and special assistants to the prime minister to forgo salaries and allowances for two months.
- Members of federal and provincial legislatures to take a voluntary 25% cut in salaries and allowances for two months.
- Government officers in Grade-20 and above earning over Rs300,000 per month to voluntarily give up two days’ salary, excluding health and education sectors.
- Federal and provincial departments to cut non-essential expenditures by 20% in the final quarter of the current fiscal year.
- Ban on purchasing new government vehicles extended until June 2026.
- Restrictions on purchasing durable goods for government offices, except limited IT procurement after scrutiny.
- Official foreign visits by ministers, parliamentarians and officials banned except for mandatory engagements, with economy-class travel required for all official trips.
- Government meetings to be conducted virtually where possible to reduce travel costs.
- Official dinners banned except for visiting foreign delegations.
- Government seminars, conferences and training sessions to require prior approval.
The government also announced administrative measures to reduce fuel consumption and energy use. Up to 50% of government employees will work from home on alternate days, while most government offices will operate on a four-day workweek, except essential services and the banking sector.
Educational institutions will also observe spring holidays from March 16 to March 31, although scheduled examinations will continue. Colleges and universities will shift to fully online classes during this period.
Additional measures include reduced speed limits on highways and motorways, as well as restrictions on wedding functions, limiting gatherings to 200 guests and allowing only a single dish to be served.
The government has advised the private sector to adopt similar steps, including remote work arrangements and shorter workweeks, to help conserve fuel and ease economic pressure during the ongoing crisis.
