Federal government announces fresh austerity and fuel conservation measures

The federal government has introduced a fresh package of austerity and fuel conservation measures, placing restrictions

ISLAMABAD: The federal government has introduced a fresh package of austerity and fuel conservation measures, placing restrictions on official vehicle use, foreign travel, procurement, government-funded events and other expenditures.

According to a Cabinet Division notification dated September 17, 2026, issued under notification No. 7-2/2026-Min.I, the measures were approved following recommendations of the Committee for Monitoring and Implementation of Fuel Conservation and Additional Austerity Measures. The notification, obtained by Minute Mirror, sets out several measures aimed at reducing government expenditure and conserving fuel.

Under the new arrangements, fuel allocations for official vehicles will be reduced by 50 percent for three months. The restriction will apply to ministries, divisions and attached departments. Operational vehicles used by the armed forces, civil armed forces, law enforcement agencies, essential services and FBR will be exempt, although administrative and non-operational vehicles of these institutions will remain subject to the reduction. Development projects have also been excluded.

The government has additionally ordered a five percent reduction in the Non-Employee Related Expenses (Non-ERE) budget for fiscal year 2026-27. The reduction will also apply to Pakistan’s foreign missions, while rent, education fees and medical expenses will remain protected under the notification.

A complete ban has been imposed on the purchase of government vehicles, including cars, jeeps, SUVs, buses and motorcycles, except where procurement is linked to development projects. The purchase of durable goods such as air conditioners, refrigerators, furniture and office machinery has also been restricted, with IT-related procurement remaining exempt.

Foreign visits by government officials have been prohibited for three months, with limited exceptions for scholarships offered by international development partners and certain training programmes arranged through the Economic Affairs Division or institutional government agreements. Where a foreign visit is approved as unavoidable, ministers, advisers and other government functionaries will be required to travel in economy class.

The notification also directs government institutions to prefer teleconferencing for meetings, except for intra-city engagements, in an effort to reduce fuel and travel-related expenses.

Government-funded official dinners have been prohibited, except for events involving visiting foreign delegations. Similarly, government-funded seminars, conferences and training programmes have been restricted. Where such events are considered unavoidable, official government venues must be used instead of hotels.

The notification also continues restrictions on commercial timings previously notified on June 19, 2026. Shops, markets and shopping malls will close at 9pm, marriage halls and marquees at 10pm, while restaurants and food outlets will remain open until 11pm. Pharmacies, hospitals, clinics, laboratories, fuel stations, EV charging points, gyms, sports facilities, IT companies and call centres fall under specified exemptions.

Requests for additional exemptions will be considered by the monitoring committee and forwarded for approval by the prime minister where required. Provincial and regional governments have also been allowed to consider adopting similar austerity measures.

The latest measures are expected to affect government spending, official mobility and commercial activity. Their impact will largely depend on implementation, monitoring and the handling of exemptions across federal and provincial institutions.

The government has also reiterated the continuation of fuel conservation and expenditure-control measures as part of its broader effort to manage public spending during fiscal year 2026-27.