By Staff Reporter
ISLAMABAD: The government will close its network of utility stores, which provide subsidized essential goods to millions of low-income families, as part of a drive to reduce expenses and promote competition, an official said on Friday.
“The government wants to exit unnecessary businesses,” Secretary of Industry and Production Saif Anjum told a Senate committee meeting. “Providing a subsidy to utility stores is detrimental to competition in the market.”
The closure, however, is expected to severely impact millions of low-income families who have long relied on discounted essential goods.
The move follows the halt of a Rs50 billion subsidy that supported around 26 million households. The subsidy, which offered up to 25 percent discounts on essential items like flour, ghee, rice, sugar, and pulses, has already been discontinued.
Goods will now be sold at regular market prices, stripping low-income families of the savings they once relied on.
“An action plan for the stores’ closure is under development, with a package for affected employees under consideration,” Anjum said. “Work is underway to transfer employees to other departments.”
The move is driven by financial constraints, with funds initially designated for the utility stores subsidy to be redirected towards alleviating the energy crisis, particularly by offering relief on electricity bills.
The closure will affect over 11,000 employees, including 6,000 permanent staff. The Utility Stores Corporation, set up in July 1971 with 20 outlets acquired from the Staff Welfare Organisation, has grown to operate over 4,000 stores nationwide after decades of expansion and restructuring.
The decision, taken at a “rightsizing” meeting chaired by Prime Minister Shehbaz Sharif on August 16, aims to reduce expenses. The government plans to explore alternative arrangements, including cash transfers to low-income groups, to mitigate the impact.
“The government lacks funds to operate the stores, leading to the decision to close them down,” Anjum told a parliamentary committee.
The closure plan, awaiting cabinet secretary approval, will be presented to the cabinet for final approval. A timeline for the shutdown will be established once approved.
Senator Aon Abbas, committee chairman, expressed concern over the employees’ fate, saying the government had no plan for their future. “Around 7,000 employees will be rendered jobless… (the government) couldn’t answer whether they would get a golden handshake or be absorbed in other departments.”
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