President, PM lead high-level meetings on austerity measures
• Proposed smart lockdowns put on hold, may be reviewed later
• Emergency steps include grounding 60pc of official vehicles
ISLAMABAD: In a major policy development, Pakistan’s provinces have agreed to share the financial burden of the oil subsidy being provided to consumers amid ongoing global economic pressures, while the government has temporarily shelved plans for smart lockdowns.
The decision was taken during a key meeting chaired by President Asif Ali Zardari on Monday. Prime Minister Shehbaz Sharif, Deputy Prime Minister Ishaq Dar, PPP Chairman Bilawal Bhutto-Zardari, federal ministers, and the chief ministers of all four provinces attended the session.
The participation of Khyber Pakhtunkhwa Chief Minister Sohail Afridi was seen as particularly significant, given that he has often stayed away from such meetings due to political differences between his party, PTI, and the ruling coalition.
According to sources present at the meeting, the provinces agreed to share the cost of the oil subsidy in line with their respective allocations under the National Finance Commission (NFC) Award.
At the same time, the proposal for imposing smart lockdowns was deferred for now, though officials said the matter could be revisited in the coming days.
Pakistan is currently grappling with a fuel crisis triggered by the ongoing US-Israel conflict with Iran and subsequent attacks on Gulf oil-producing states, which have placed severe pressure on global energy supplies.
Earlier, the provinces had resisted the Ministry of Finance’s request to contribute around Rs200 billion to protect consumers from further increases in petroleum prices.
Punjab and Sindh, the two largest provinces, were expected to contribute more than Rs102 billion and Rs60 billion respectively. However, both had initially argued in favour of passing international price increases on to the domestic market to encourage reduced fuel consumption.
A statement issued by the Presidency said President Zardari directed authorities to take all possible steps to reduce the burden of rising prices on ordinary citizens, particularly in essential goods and services.
The meeting reviewed measures being taken by all four provinces, as well as Gilgit-Baltistan and Azad Jammu and Kashmir, to control price pressures, ensure the supply of essential commodities, and minimise the impact on the public through a coordinated national response.
Participants were also briefed on the wider regional situation and its possible implications for Pakistan’s security, economy, and food security.
Officials informed the meeting that timely decisions had helped prevent any disruption in fuel supplies despite the global crisis. Sufficient fuel reserves are currently available, while arrangements are also being made to secure future requirements.
The meeting was told that the prime minister had repeatedly rejected proposals to increase oil prices, and that savings generated through austerity measures were being redirected towards public relief efforts.
As part of the government’s cost-cutting drive, expenditures have been reduced, the development budget has been trimmed, and 60 per cent of official vehicles have been grounded with immediate effect.
President Zardari reiterated that economically vulnerable groups would not be left unsupported during this difficult period. He emphasised the need for coordinated policy decisions across economic management, energy planning, food security, and national security.
He also called for public awareness campaigns aimed at reducing fuel consumption, promoting the use of public transport, and encouraging ride-sharing and shared mobility practices.
In a separate meeting earlier, Prime Minister Shehbaz Sharif said the government was making every effort to provide relief to low- and middle-income groups and vowed not to abandon them during the crisis.
He said the austerity measures had started from within the government itself, with cuts in expenditures and the grounding of 60pc of official vehicles.
Officials also briefed participants on fuel conservation measures, future policy options, and the current fuel stock position.
The meeting was informed that coordination with provincial governments was underway to accelerate the registration of motorcycles and rickshaws, enabling quicker delivery of relief measures to the public.
An Intelligence Bureau audit report on the implementation of the prime minister’s fuel-saving and austerity campaign was also presented.
Authorities assured the meeting that strict implementation of the austerity drive was continuing, and that sufficient fuel and medicine stocks were available to meet the country’s needs, with plans also being made for future requirements.
Despite an increase in the levy on high-octane fuel used by luxury vehicles, jet fuel prices have remained unchanged.