Pakistan employees face the heat: PM Shehbaz Sharif approves up to 30% salary cuts in state firms amid fuel crisis

Pakistan Prime Minister Shehbaz Sharif on Saturday approved salary cuts ranging from 5 to 30 per cent for employees of state-owned enterprises and autonomous institutions as part of a wider austerity drive to address the economic fallout of the ongoing fuel crisis.

The decision was taken during a high-level review meeting chaired by the prime minister to assess austerity and savings measures announced earlier this week after the sharp rise in fuel prices linked to the ongoing US-Israel-Iran conflict.




According to a statement issued by the Prime Minister’s Office, the meeting reviewed the impact of fuel price fluctuations and steps taken by the government to reduce expenditure.

“It was decided in the meeting that, like government employees, there will be a 5-30 per cent cut in the salaries of employees of state-owned enterprises and autonomous institutions under government patronage,” the statement said.



The government said the funds saved through these austerity measures would be used “only for public relief”.

Officials at the meeting were also informed that a third-party audit would supervise a 50 per cent reduction in fuel allocations for government vehicles, while 60 per cent of these vehicles will be taken off the roads over the next two months.

The government also decided that representatives serving on the boards of corporations and institutions will no longer receive participation fees, which will instead be counted as part of the savings.

"The meeting was also briefed on the implementation of the government's complete ban on the purchase of new vehicles and the ban on all other government purchases,” the statement said.

Under the austerity plan, the next two months’ salaries of cabinet members, ministers, advisers and special assistants will also be “used as savings for public welfare”.

“The complete ban on foreign visits of government officers, ministers, ministers of state and special assistants will remain in place,” the statement said, quoting the prime minister.

Pakistan has already begun feeling the economic impact of the conflict in the Middle East. Petroleum prices were increased by Rs 55 per litre last Friday, prompting the government to introduce measures to curb fuel consumption.

Earlier steps included a 50 per cent reduction in fuel allocations for official vehicles for two months, removing 60 per cent of government vehicles from the roads during this period and introducing a four-day work week for government offices.

(With inputs from PTI)