Islamabad, Pakistan – Pakistan has ordered sweeping emergency austerity and fuel conservation measures after a disruption in oil and gas supplies caused by the United States and Israel’s war against Iran and an escalation of the conflict in the Middle East.
Prime Minister Shehbaz Sharif announced the measures in a televised address to the nation on Monday night, warning that disruptions to shipping traffic in the Strait of Hormuz – a vital route for oil trade – had put Pakistan’s economy under direct threat.
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“The entire region is currently in a state of war,” Sharif said as he laid out a series of measures, including the shift to a four-day work week for government employees and spring break for schools from March 16 until the end of the month.
Sharif said 50 percent of government staff will work from home on a rotating basis and recommended similar arrangements for the private sector, giving an exemption to key sectors such as banking.
While schools will remain closed for two weeks starting Monday, scheduled testing will take place. Universities and higher education institutions have been ordered to move to online classes to save fuel.
The austerity measures also include members of the federal and provincial cabinet giving up their salaries and allowances for the next two months, while the salaries of members of the federal and provincial legislatures will see a 25 per cent cut over the period.
Ministers, parliamentarians and officials can travel abroad only for essential purposes and in economy class.
All in-person meetings between the federal and provincial governments have been banned and must be held online, and fuel allocations from government offices have also been reduced.
People have been asked to restrict social gatherings, with weddings and parties capped at 200 guests and a limited main course.
High dependence on imported energy
Pakistan depends on imports for more than 80 percent of its oil needs. Between July 2025 and February 2026, its oil imports amounted to $10.71 billion, while the calendar year total in 2024 was more than $15 billion.
But the recent energy crisis has triggered the biggest fuel price increase in the country’s history: gasoline was $1.15 a liter on Tuesday and diesel was $1.20 a liter, an increase of 20 percent since last week.
Energy analyst Amer Zafar Durrani, a former World Bank official and chief executive of the advisory firm Reenergia, said the government’s austerity measures might work in the short term, but they leave the main driver of fuel demand largely unaddressed.
“Transportation dominates oil consumption,” Durrani told Al Jazeera. “Approximately 80 percent of petroleum products are used in transportation, so the country’s dependence on oil is fundamentally a mobility problem.”
He said measures such as pay cuts or procurement freezes mainly affect public finances and do little to reduce domestic fuel use. He suggested that improving freight logistics by moving more freight from roads to rail could have a better effect.
Regarding rising oil prices, Durrani said Pakistan could be particularly affected given the value of its currency in the global market.
“The biggest risk does not come from oil prices alone. The real macroeconomic trigger is currency depreciation, which amplifies the impact of higher oil prices on domestic inflation,” he said.
Durrani said a long-term solution lies in harnessing more electric power for transportation needs, reducing industries’ reliance on diesel and expanding renewable energy.
“Without these structural changes, any global energy shock will continue to threaten Pakistan’s economy,” he said.
Pakistan’s vulnerability also extends to natural gas. It has been importing liquefied natural gas (LNG) since 2015 after domestic reserves dwindled. LNG now accounts for almost a quarter of Pakistan’s electricity supply, with the power sector being the largest consumer.
Qatar is Pakistan’s main LNG supplier and its cargoes pass through the Strait of Hormuz. Iran’s retaliatory attacks have targeted energy infrastructure across the Middle East, including oil traffic passing through the Strait.
Rising costs before Eid
Pakistan’s fuel crisis emerged during the final days of Ramadan, as families prepare for the Eid al-Fitr holiday, the most important Muslim holiday.
Higher gasoline prices have already raised transportation fares and the cost of food, adding pressure on household budgets at a time when spending typically increases.
Muhammad Zubair, a plumber from the capital Islamabad whose family lives in Muzaffarabad, the main city in Pakistan-administered Kashmir, says the fuel crisis has directly affected his income.
“I still commute to work on my motorcycle, but with fuel getting so expensive, it eats into my savings,” he told Al Jazeera, adding that his plans to return home a week before Eid are now thwarted as he might have to stay in the city and save money.
Sohail Ahmed, a 27-year-old delivery driver who supports a family of seven, says the government’s austerity measures matter less to him than the rising cost of fuel.
“I won’t get any benefits if they (government employees) work three days or five days a week,” he told Al Jazeera.
“For me, the main concern is the price of fuel because it increases the cost of everything. As this situation will not end soon, I don’t have much to think about on Eid.”
