The federal government has confirmed that utility stores closed in Pakistan from today, ending all operations of the Utility Stores Corporation (USC) nationwide.
Federal Minister Tariq Fazal Chaudhry said during a press conference that the closure decision was taken due to continuous monthly losses of around Rs 600 million, making the corporation unsustainable.
A total relief and severance package of Rs 28.2 billion has been approved for USC workers, covering permanent, contract, and daily-wage employees. This marks the first time in Pakistan that non-permanent staff are included in such a closure package.
The government has also allocated Rs 2 billion for small vendors who supplied goods to USC, while payments for larger vendors will be made later. Salaries of the last one and a half months will also be cleared.
The Economic Coordination Committee (ECC) has approved a supplementary grant of Rs 30.216 billion. This amount will be used for severance, liabilities, and the transparent disposal of USC assets.
The process has been established by a special committee under the Finance Ministry. The committee includes the Ministry of Finance and the Ministry of Industries and Production to ensure compliance during the closure phase.
According to official records, around 11,350 to 11,614 employees were working in the Utility Stores Corporation before the shutdown. These include permanent staff, contractual workers, and daily wagers.
With utility stores closed in Pakistan, the relief package distribution has been announced as follows:
- Rs 13.5 billion for permanent employees
- Rs 6 billion for contract employees
- Rs 2 billion for daily wagers
- Rs 2 billion for small vendors
Utility Stores Background
The Utility Stores Corporation was established in 1971 and later became the country’s largest chain of government-subsidized outlets, providing essential goods at controlled prices. By 2009, the corporation had more than 5,500 outlets and over 12,000 employees.
The corporation still suffers massive losses, and as of September 2025, when utility stores closed in Pakistan, its long-term contributions to subsidized food delivery have officially ceased.
The USC closure is a subset of the wider privatization and reorganization of the loss-making state-owned firms. The poor households depending on the subsidized products in utility shops will turn to the privatized retail shops and government subsidies in the future.
Economists note that the decision reflects a fiscal adjustment strategy, but it has raised concerns about access to affordable essentials for vulnerable households.
