Govt may revive fuel austerity measures as oil prices rise: report

The federal government may restore fuel conservation and austerity measures as early as this week or next as renewed Middle East hostilities push up oil prices and increase pressure on Pakistan’s foreign exchange reserves. 

Dawn reported, citing a senior government official, that Prime Minister Shehbaz Sharif has discussed the proposed measures over the past week, and the federal cabinet may take up the matter for formal approval. 

Measures introduced in March remain under consideration, including a four-day working week, a 50% reduction in staff attendance, a 50% cut in official vehicle use, online meetings, restrictions on foreign travel and non-employee expenditure, lower motorway and highway speed limits, and salary reductions for high-income public employees.

Authorities may also encourage greater use of online classes and reintroduce limits on market and business operating hours.

The measures were withdrawn in the third week of June after the United States and Iran reached a ceasefire understanding and oil markets stabilised. Prices have since risen again.

Officials said the final decision would depend on political discussions and technical input from the Ministry of Finance and the State Bank of Pakistan.

The government has decided in principle to prevent further depletion of foreign exchange reserves, which fell to about $22.67 billion on July 10 from $23.99 billion at the start of the month. The latest level provides slightly more than three months of import cover.