Suez Canal Authority to hike transit fees for oil tankers

Egypt’s Suez Canal Authority (SCA) is going to raise transit surcharge fees for crude oil and petroleum product tankers from April, the authority says in a circular.

PHOTO: A ship transiting through the Suez Canal. Desert sand on both sides. The ship's bow and rail in the foreground. Getty Images

The authority has decided to increase the surcharges imposed on loaded crude oil and petroleum product tankers from 15% to 25% of normal transit fees, and for empty tankers from 5% to 15% for vessels moving in both directions. However, the charges levied are temporary and can be changed or cancelled according to market conditions.

“​[The transit fee hike is] In line with the significant growth in global trade, the improvement of ships’ economics, the Suez Canal waterway development, and the enhancement of the transit service”, the circular stated.

Global oil and gas trade routes have been changing since Russia’s invasion of Ukraine led to sanctions on Moscow. This has increased demand for oil and gas tankers to move products over longer distances. Global economies have also been recovering from the Covid-19 pandemic, which has increased demand for traded goods more broadly in the past year.

Egypt has also been trying to widen parts of the busy Suez Canal to allow for two-way traffic and therefore ease some of the pressure, especially in the event of a blockage. In March 2021, the mega container ship Ever Given got stuck in the canal and blocked vessel traffic for six days, leading to a massive backlog.

By Debarati Bhattacharjee

Please get in touch with comments or additional info to news@engine.online