Egypt said on Saturday that it will increase transit fees for vessels, including oil-laden tankers, passing through the Suez Canal, one of the world’s most crucial waterways.
The Suez Canal Authority said in a statement on Saturday that it will add 15% to the fees for tankers carrying oil and petroleum products, and 10% for dry bulk carriers and cruise ships. The authorities chief, Osama Rabie, said the hikes, which will take effect on Jan. 1, are inevitable and a necessity. He blamed booming global inflation rates, which have increased the cost of the waterways operations, maintenance, and maritime services.
About 10% of global trade, including 7% of the world’s oil, flows through the Suez Canal, a major source of foreign currency to Egypt, the most Arab populous country with over 103 million people. Egypt has faced towering economic challenges and is running low on foreign currency needed to buy essentials such as grain and fuel. Authorities said 20,649 vessels passed through the canal last year, a 10% increase compared to 18,830 vessels in 2020. The annual revenues of the canal reached $6.3 billion in 2021, the highest in its history.
Canal authorities have been working to widen and deepen the waterways’ southern part, since a hulking vessel ran aground and closed off the canal in March 2021. The six-day blockage disrupted global shipment. On August 31, an oil tanker ran aground and briefly blocked the waterway before it was fed.
“The (tolls) increase is inevitable and is a necessity in light of the current global inflation, which translates into increased operational costs and the costs of the navigational services provided in the canal,” SCA Chairman Ossama Rabiee said in the statement.
He said the SCA adjusted the tolls through clear mechanisms incorporating the changes in the maritime transport market, noting the canal remains the most efficient and least costly route compared to alternative routes.