The chairman of the Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) has expressed concerns over the surging costs being experienced by the country’s export industries.

Mr. Fawad Ijaz Khan named the fact that cargo airlines had decided to increase fuel surcharges by Rs3/kg ($0.07) to Europe and the US, from June 1 2004, as a key worry. The 33% price hike has been attributed to the increased cost of international oil prices. It is feared that if prices don’t stabilise, the surcharge could increase to Rs18/kg ($0.40).

Fawad urged the Pakistani government to investigate the issue and attempt to convince airlines not to implement the increases. He suggested that the Government should provide a subsidy to pay for the charge.

He also pointed out that State Bank of Pakistan had increased its re-finance rates by 0.5% to 2%, effective June 1 2004. He added that the export industry was also under pressure to raise the salary and wage structure of its employees, which would have a significant affect on the overall cost of exporting.

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