Egypt: Suez Canal authority raises transit fees for oil tankers to 15%

The Suez Canal Authority announced Tuesday it will temporarily raise fees levied on tankers carrying crude oil and petroleum derivatives for ships transiting the waterway in both directions from the beginning of May.

Egypt’s Suez Canal Authority has temporarily raised a surcharge levied on tankers carrying crude oil and petroleum derivatives transiting the canal in both directions to 15 percent, up from 5 percent.

The new charges, 15 percent, up from 5 percent currently, will take effect on May 1, the authority said in a statement. It, however, clarified that the increase is “temporary” and will be revised or scrapped based on global shipping conditions.

The decision comes on the back of “significant growth in global trade, the improvement of ships’ economics, the Suez Canal waterway development and the enhancement of the transit service,” the authority said.

The decision also comes following the Egyptian central bank’s decision to raise interest rates by 100 basis points.

In late February, the Suez Canal approved an additional fee on different types of ships passing the canal. The hike ranges between 5 and 10 percent.

The authority also announced that the tolls on laden and ballast liquefied petroleum gas tankers, chemical tankers and other liquid bulk tankers will be raised to 20% of normal dues, from 10% currently. The additional charges levied on laden and ballast dry bulk vessels will increase to 10% of normal transit dues, from 5% currently, while other vessels will have to pay surcharges of 14%, up from 7%.

The fee hikes come as public finances are under pressure from rising international commodity prices caused by the conflict between Russia and Ukraine.

The Egyptian government is having difficulty to find an extra EGP 15 bn to cover the heightened cost of wheat, while oil prices are way in excess of the level of the budget set by the Finance Ministry.

The move will further increase Suez Canal revenues, which hit a record high of $6.3 bn last year.

Egypt has already hiked tolls once this year, raising fees by 6% for most ships at the start of February.