Iran war fuel crisis forces Pakistan to close schools, take austerity measures
Pakistani Prime Minister Shehbaz Sharif announced on Monday the closure of all schools through the end of the month, and remote work for all university students and half the workforce, as his country implements steep austerity measures amid soaring global fuel prices.
The US-Israel war on Iran is now into its second week, with few signs that US President Donald Trump plans to scale back the operation. Iran has been retaliating against US assets in the Gulf - a region that produces a quarter of the world's entire oil supply - and choking off the Strait of Hormuz.
“These attacks have posed a great threat to the whole region,” Sharif said in televised remarks.
With Pakistan highly dependent on energy exports from the Gulf, "the government took difficult decisions for the country’s economy", he added.
The four largest exporters of fuel to Pakistan are the UAE, Qatar, Saudi Arabia, and Kuwait, all countries that have either stopped production due to the war on Iran, or cannot export due to the closure of the Strait of Hormuz.
Around 20 percent of all global petroleum consumption passes through the Strait of Hormuz.
Together, Qatar and the UAE account for around 99 percent of Pakistan's Liquefied Natural Gas imports.
Fifty percent of the staff in both the public and private sectors in Pakistan will work from home, Sharif said, excluding those in essential services such as agriculture and banking. Institutes of higher learning will also move their classes online.
Government expenses will be scaled back by 20 percent, and large purchases such as furniture and air conditioners are prohibited.
Government officials who earn more than 300,000 Pakistani rupees ($1,074) a month will have two paydays deducted, and the use of government vehicles will be reduced by 60 percent for the next two months. Fuel allowances for those vehicles will be cut in half.
The federal cabinet will not be paid a salary for the next two months, and members of parliament will see a 25 percent reduction in their wages.
All lawmakers are banned from foreign trips.
Official iftars for Ramadan and other dinners and parties have also been banned.
Global shock
It is not just Pakistan that is suffering from the shock to global energy markets, but it may be one of the first to implement austerity measures.
Global commodity markets were jolted when they reopened on Monday, as the war on Iran continued to escalate over the weekend. Israel struck over 30 oil depots in Iran on Saturday, including in Tehran and Karaj.
The strikes on depots went far beyond what the US expected when Israel notified it in advance, according to a report in Axios.
Iran threatened to attack oil facilities in neighbouring countries in response.
It launched a fresh wave of attacks on the Gulf on Sunday, with attacks reported in the UAE, Qatar, Bahrain, and Kuwait.
Oil prices jumped to the highest levels since Russia's invasion of Ukraine in 2022, before falling back slightly. Brent crude prices soared as high as $119 per barrel, while the US's West Texas Intermediate rose to $119.48 a barrel.
Pakistan had already been suffering from high inflation, soaring debt and low foreign exchange reserves. It was also embroiled in a war of its own.
Before the war on Iran began, Pakistan had been carrying out air strikes along its border with Afghanistan because of what it described as militias being harboured by the Taliban, intending to carry out attacks in Pakistan.
Nearly a year earlier, it was exchanging fire with India, in what was a brief but tumultuous period, given that the two countries are nuclear powers.
Sharif has condemned the US-Israeli attacks on Iran as well as the Islamic Republic's attacks on the Gulf, and offered to be a mediator to bring an end to a rapidly escalating conflict.
"We tried to take the middle road so that the burden on you is less," he told his compatriots on Monday.
"I will try [to ensure] that the burden does not fall on you. For this, efforts are ongoing day and night," he added.
This article was sourced from Middle East Eye.
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