Pakistan Cuts Fuel Prices and Implements National Austerity

The Government of Pakistan reduced petroleum prices effective September 29, cutting petrol by Rs2.27 per litre to Rs389.03 and high-speed diesel (HSD) by Rs3.56 per litre to Rs404.97. These final reductions exceeded preliminary estimates of Rs1.37 for petrol and Rs3.55 for HSD. The adjustments were made under a daily pricing mechanism adopted in July to better manage volatility caused by exchange-rate movements and Middle East tensions.

To further ease economic pressure, Prime Minister Shehbaz Sharif announced a fuel relief scheme providing discounts for motorcycles, rickshaws, and vehicles under 800cc, targeting roughly 11.8 million beneficiaries. Simultaneously, the government reintroduced strict austerity measures, including a 50% reduction in fuel allocations for official vehicles and a mandated 9 p.m. closing time for most shops and markets.

These domestic policy shifts occur against a backdrop of global oil market instability. Prices recently rose after U.S. President Donald Trump rejected an Iranian peace proposal concerning the Strait of Hormuz, a critical shipping route for global oil supply.