Shehbaz Sharif Orders Major Pay Cuts At Pakistan’s State Firms. Reason? Iran War Fuel Shock

Last Updated:March 14, 2026, 19:46 IST

Pakistan PM Shehbaz Sharif approved 5-30% salary cuts for state-owned enterprise employees to ease economic strain from the US-Israel conflict with Iran, raising energy prices.

Pakistan Prime Minister Shehbaz Sharif has approved salary deductions ranging from 5 to 30 per cent for employees of state-owned enterprises (SOEs) and autonomous institutions, as part of an austerity drive aimed at easing the economic impact of the ongoing war in the Middle East.

The decision comes as global energy prices surge following the escalation of the US-Israel conflict with Iran, which has disrupted shipping routes and driven up crude oil prices.

According to officials, the salary cuts will apply across several government-linked organisations, with higher-paid employees facing steeper reductions. The measure is intended to reduce fiscal pressure as Pakistan grapples with rising import costs for energy and fuel.

The conflict has already pushed global oil prices above $100 per barrel, sharply increasing Pakistan’s fuel import bill and putting pressure on domestic energy prices.

In response, the government recently raised petrol prices by around 15 per cent, pushing the cost to about PKR 345 per litre, while high-speed diesel rose to roughly PKR 355 per litre. The increases have affected transportation costs and food prices across the country.

Gas tariffs have also climbed significantly. Household gas prices have increased by up to 25 per cent in some categories, with the government citing higher import costs for liquefied natural gas (LNG) amid the global energy market disruptions.

Officials say the austerity measures are meant to help stabilise government finances while Pakistan manages the economic fallout from the conflict and rising global energy prices.

Economists warn that the rising cost of fuel and gas could further strain Pakistan’s already fragile economy, increasing inflation and putting additional pressure on households and businesses.

News world Shehbaz Sharif Orders Major Pay Cuts At Pakistan’s State Firms. Reason? Iran War Fuel Shock

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