State government shuts down all state-operated utility shops
The Utility Stores Corporation (USC) in Pakistan officially ceased operations nationwide on July 31, 2025, ending its decades-old subsidized retail system designed to provide essential goods at lower prices to the public.
History and Reasons for Closure
Established in 1971, the USC was a government-run retail chain aimed at supplying essential commodities at subsidized rates. It initially took over 20 outlets from the Staff Welfare Organisation and expanded to about 6,000 stores nationwide. However, persistent financial losses led the federal government under Prime Minister Shehbaz Sharif to decide on a full shutdown and privatization by the end of July 2025.
The government cited continued losses and inefficiencies as core reasons, with a final high-level meeting on June 28, 2025, directing the Privatization Commission and Ministry of Industries to execute the shutdown and transition.
Impact on Employees
The USC employed around 11,000 workers nationwide. The government announced a Voluntary Separation Scheme (VSS) for employees, signaling job losses and workforce downsizing. USC employees and their union vowed to resist the closure through protests and legal action to protect workers’ rights amid fears of widespread unemployment.
Government’s Response and Transition Plan
The government directed the immediate halt of buying and selling activities, clearing store shelves, and relocating goods to warehouses before the final shutdown. Loss-making stores were to be permanently closed, while others might be handed to the private sector as part of restructuring efforts. Officials emphasized asset liquidation, employee transition, and maintaining food security during and after the closure.
Public and Social Impact
USC stores provided essential items at significantly lower prices compared with the open market. For instance, sugar was priced at Rs164/kg in USC versus Rs200/kg in the open market. The closure raised concerns about increased prices for low-income families and inflationary pressures on essential goods.
Additional Developments
- In September 2024, Minister for Industries and Production Rana Tanveer Hussain announced that the government was not considering proposals to close the USC.
- The Pakistani senior minister Sharjeel Inam Memon of the Pakistan People's Party (PPP) has criticized the federal government's decision to shut down the Utility Stores Corporation (USC).
- Protesters warned that closing down utility stores would worsen inflation and push thousands of workers into unemployment.
- The minister suggested that rather than shutting down the utility stores, they should be modernized and made functional.
- The minister stated that the closure of the USC and the termination of 12,000 employees is an attack on the livelihoods of thousands of families.
- These people were benefiting from nearly 4,000 stores across the country.
- The USC was operating 4,000 stores across the country before the closure.
- The closure was met with a protest by USC employees in Islamabad last week.
- The minister demanded that instead of laying off employees, they be adjusted into other departments.
- The closure will bring an end to the decades-old subsidised retail system.
- The Pakistani government announced the closure of all utility stores across the country on July 31, 2025.
Gold prices, influenced by inflation, began to rise due to the closure of Utility Stores Corporation (USC), as the subsidized essential goods provided by USC were no longer available, pushing up costs for consumers. With the shutdown of 4,000 USC stores, various finance and business analysts discussed potential options for the government to maintain food security and ease inflationary pressures on essential goods.
