In a dramatic midnight resolution to quell nationwide outrage, Pakistan’s Prime Minister Shehbaz Sharif has ordered a U-turn in fuel pricing, in a televised address to the nation. In a seven-minute televised address late Friday night, the prime minister ordered a reduction in petrol levy immediately to PKR 80 per litre for all petrol retailers and the government’s retail price to PKR 378 per litre.
The move comes as the government is trying to contain the fallout of a price hike on Thursday which took petrol and diesel prices to the PKR 500 level. The volatility is largely due to the intensifying conflict in West Asia and the effective closure of the Strait of Hormuz, which has choked global energy supplies.
Price Cuts And Stability
Just 24 hours earlier, the government had initiated a 43% hike in petrol from PKR 321.17 to PKR 458.41. At risk of civil unrest, Sharif’s new policy cuts the government levy down from PKR 160 back to a more manageable level.
"I am announcing an immediate reduction of PKR 80 per litre. This new price will take effect from midnight and remain unchanged for at least one month," Sharif said. He conceded the 'storm of inflation' was a direct result of the Gulf region's instability but emphasized that the state would absorb the shock to protect the common man.
Austerity: No salary for the Cabinet
To lead by example in the midst of the economic crisis, the Prime Minister intensified the government’s austerity measures. It was previously decided that the federal cabinet would forgo salaries for two months but Sharif has now extended this period to six months.
"We are trying to shield you. Through careful savings and prudent investment of resources, we are trying to shield you. My cabinet will not receive salaries for the next half-year as we navigate this fuel crunch together," he said.
Targeted Relief For Vulnerable Sectors
In addition to the general price cut, the Prime Minister presented a comprehensive relief package for those hardest hit by the rising costs:
- Motorcyclists: A direct subsidy of PKR 100 per litre.
- Transport: One-time grants of PKR 70,000 to 80,000 for goods transport and PKR 1,00,000 for passenger vehicles.
- Agriculture: Small farmers will get financial assistance of PKR 1,500 per acre.
- Public Transit: A freeze on Pakistan Railways' economy class fares to ensure affordable travel for low-income citizens.
The Global Context
The Prime Minister’s speech highlighted the precarious position of Pakistan’s economy as the Iran war disrupts petroleum supply lines. And with global oil prices fluctuating wildly, the Sharif administration is betting on these deep subsidies and austerity measures to sustain social stability. But economists warn that the continuation of those high subsidies would be more painful for the national exchequer if the war in the Middle East lasts into the summer.
Pakistan Fuel Relief At a Glance
- New Petrol Price: PKR 378 per litre (Effective April 4, 2026).
- Reduction: PKR 80 per litre.
- Cabinet Salary Waiver: 6 Months.
- Special Subsidy: PKR 100/litre for bikes; PKR 1,500/acre for farmers.
It is a bold move to calm the public, but with the Strait of Hormuz still a flashpoint, do you think these domestic price cuts are sustainable if the international oil market stays this volatile?
