Egypt’s Suez Canal Authority (SCA) has raised toll fees by 5% for oil tankers and vessels carrying petrochemicals, and a smaller increase of 2% that will apply to container ships and car carriers, as per ICIS news. The canal, which links the Mediterranean Sea and the Gulf of Suez, is the quickest sea route between Asia and Europe, saving an average 15 days on a voyage.
The new fees took effect from May 1 as the Egyptian government seeks ways to boost revenue and prevent a currency crisis. Last year, Egypt had increased tolls on the waterway by 3%.
"The increase in toll is in place and we feel the hike is not that big to the point that would make shippers leave the Suez Canal," said SCA spokesman Tarek Hassanein. Prior to the implementation of this year’s toll increase, the International Chamber of Shipping had warned that added expense might cause financially strapped ship operators to seek alternate routes.
“The decision to raise fees was based on several recent studies conducted by the SCA on marine traffic and toll revenues,” Hassanein said. Suez Canal revenues have become more important because the country’s foreign currency reserves have shrunk to US$13.5 bln (€10.4 bln) currently, from US$36 bln on the eve of the 25 January Revolution. In 2012, the number of container ships using the canal fell 12% to 6,332. A total of 17,225 ships of all types travelled the link last year, according to a latest data by SCA.
Meanwhile, freight rates for the Middle East and North Africa (MENA) region-to-Asia route declined in the past few weeks as spot trading activities have been subdued given an underlying weakness in demand for chemical cargoes.