ISLAMABAD – Pakistan is tightening its belt once again. With economic pressures mounting, the government unveiled sweeping austerity plan designed to cut spending, save fuel and curb non-essential expenses, from slashing official vehicle fuel by 50% and restricting foreign trips to banning new government cars and bringing forward closing times for markets and restaurants. Here’s what the new restrictions mean.
Pakistan’s federal government has launched a sweeping austerity and fuel-conservation drive, introducing a wide-ranging package of restrictions aimed at cutting unnecessary public expenditure, reducing fuel consumption and enforcing greater financial discipline across government institutions.
The measures, announced by the Cabinet Division, include sharp cuts in fuel allocations for government vehicles, a ban on new vehicle purchases, reductions in non-salary spending, restrictions on official foreign travel and government-funded events, and new operating hours for commercial establishments.
At the centre of the plan is an immediate 50% reduction in fuel allocations for all administrative and non-operational government vehicles for three months.
The restriction will not apply to vehicles used by the armed forces, Civil Armed Forces, law-enforcement agencies, emergency services and operational vehicles of the Federal Board of Revenue (FBR), allowing essential security, enforcement and emergency operations to continue without disruption.
The government has simultaneously imposed a complete ban on the purchase of new government vehicles, tightening controls on what can be one of the more visible areas of public-sector expenditure.
Financial restrictions are also being extended to government procurement. For fiscal year 2026–27, the non-salary budget will face a 5% reduction, while procurement of all types of durable goods has been prohibited, with IT equipment exempted from the restriction.
No Foreign Travel for 3-Month Freeze
Official overseas travel is another major target of the austerity campaign.
For the next three months, non-essential official foreign trips will remain banned. Exceptions have been made for travel related to scholarships, foreign training courses and international agreements.
The government has also introduced a cost-cutting approach for unavoidable international engagements. Where attendance at an overseas event is considered essential, Pakistan will generally be represented by its ambassador or high commissioner already stationed in the relevant country, rather than sending a separate delegation from Pakistan.
For ministers and government officials who are required to travel abroad, economy-class travel will be mandatory on essential trips.
Government Meetings and Events Shift Online
The cost-cutting measures extend to the way government business is conducted. Departments have been directed to hold official consultations and meetings preferably through teleconferencing and other online platforms, reducing the need for physical gatherings and associated expenses.
The government has also banned all government-funded official dinners, except those involving foreign delegations.
Similarly, government-funded seminars, conferences and workshops will not be permitted. If a programme is considered unavoidable, officials have been instructed to use government auditoriums or committee rooms rather than external venues.
The austerity campaign also extends to private functions, with a “one-dish” restriction ordered for all wedding ceremonies as part of a broader push for simplicity.
Markets to Close at 9pm, Restaurants at 11pm
Alongside cuts in government expenditure, the federal government has introduced a new schedule for commercial establishments as part of its energy-conservation efforts.
Under the new timings:
- Shops, shopping malls and markets will close at 9pm.
- Wedding halls and other commercial event venues will close at 10pm.
- Restaurants, cafés and food outlets will close at 11pm.
A number of essential services and businesses have been excluded from these restrictions.
The exemptions cover home-delivery and takeaway services, hospitals, pharmacies, medical laboratories, tandoors, bakeries, milk shops, fuel stations, EV charging stations, call centres, IT companies, gyms and sports facilities.
The exemptions are intended to ensure that essential services and businesses serving critical public needs can continue operating beyond the prescribed closing times.
Special Committee to Review Exemption Requests
The government has also established a mechanism for handling requests for exemptions from the austerity measures.
According to the notification, all such requests will be examined case by case by a specialized committee, which will subsequently submit its recommendations to the Prime Minister.
The federal government is also seeking to extend the austerity campaign beyond the central administration. The four provincial governments and regional administrations have been directed to consider implementing similar cost-saving measures at their respective levels.
Islamabad Markets to Close Early Under New Austerity Measures
