Federal govt orders Salary cuts for SOE employees under new austerity measures

PM Shehbaz takes decision in a meeting held to review impact of rising petroleum prices and implementation of austerity measures in light of ongoing crisis in Middle East

ISLAMABAD: (UrduPoint/Pakistan POint News-March 14th, 2026) The federal government has decided to reduce the salaries of employees working in state-owned enterprises (SOEs) and autonomous institutions operating under government patronage by 5 to 30 percent as part of a broader austerity plan aimed at generating funds for public relief.

The decision was taken during a meeting chaired by Prime Minister Shehbaz Sharif on Saturday to review the impact of rising petroleum prices and the implementation of austerity measures in light of the ongoing crisis in the middle East.

According to a statement issued by the Prime Minister’s Office, the salary reduction for employees of SOEs and autonomous bodies will follow similar cuts already announced for government employees. The funds saved through these measures will be used exclusively for public welfare and relief efforts.

The meeting was attended by Finance Minister Muhammad Aurangzeb, Petroleum Minister Ali Pervaiz Malik, Information Minister Attaullah Tarar, and Minister of State for Finance Bilal Azhar Kayani. Chairman of the Federal board of Revenue, Rashid Mahmood Langrial, was also present.

During the meeting, the government reviewed previously announced austerity initiatives. It was decided that the four-day work week would not apply to law enforcement agencies or the Federal Board of Revenue, which will continue their duties as usual.

The meeting also reaffirmed that a third-party audit will be conducted within two months to evaluate the implementation of the decision to ground 60 percent of government vehicles and reduce fuel allocations for official vehicles by 50 percent across departments. A complete ban on the purchase of new government vehicles and other non-essential government expenditures will remain in force.

In addition, cabinet members, ministers, advisers, and special assistants to the prime minister will contribute their next two months’ salaries toward government savings for public welfare. The government has also maintained a ban on foreign visits by ministers, advisers, special assistants, and senior officials, directing them to prioritize teleconferencing and virtual meetings instead.

Prime Minister Sharif further directed that Pakistani embassies around the world observe Pakistan Day on March 23 with simplicity in line with the austerity campaign. Relevant government secretaries have been instructed to monitor the implementation of these measures and submit daily progress reports to the review committee.

The austerity measures come amid economic pressure triggered by the ongoing Iran–Israel–United States conflict, which has significantly disrupted global energy markets following the closure of the Strait of Hormuz. The crisis has led to a sharp rise in global oil prices.

Last week, the government increased petrol and high-speed diesel prices by Rs55 per litre in response to the surge in international oil prices. However, despite continued volatility in global markets, the prime minister decided on Friday to keep domestic fuel prices unchanged under the weekly review mechanism.

Separately, a committee established by the prime minister to monitor petroleum prices held a virtual meeting chaired by Finance Minister Aurangzeb. Officials briefed the meeting that petroleum stocks across the country remain at comfortable levels, with adequate reserves and additional shipments arranged to maintain supply.

The committee reviewed global crude oil market trends, ongoing import arrangements, refinery operations, and maritime logistics. Authorities informed the participants that cargo shipments were already en route and further imports were being arranged to strengthen national reserves.

Officials also discussed measures to ensure efficient fuel consumption and reduce pressure on imports during periods of global price volatility. A digital monitoring dashboard is also being developed to provide real-time updates on fuel stocks, depots, and retail supply conditions.

Aurangzeb said the government’s top priority was to ensure uninterrupted availability of petroleum products while minimizing the burden on the public. He added that authorities would continue closely monitoring international energy markets, domestic stock levels, and supply chain operations to ensure market stability and protect Pakistan’s energy security.