CAIRO: The Egyptian government has rejected rumors about the impact of the construction of commercial routes to compete with the Suez Canal on its foreign currency earnings.
The Cabinet’s media center said it had contacted the Suez Canal Authority, which stressed that the foreign currency revenues of the Suez Canal have not been affected.
The center confirmed that the reports of the Eilat-Ashkelon pipeline restarting the movement of oil trade through the canal are incorrect, explaining that the percentage of that impact will not exceed 12-16 percent of the volume of northbound oil trade.
The authority said the canal route will remain the shortest and safest way to connect the East and the West as shipping containers through the canal can transport larger quantities of goods at a lower cost than land routes.
Reports and analytical studies prepared by the authority’s economic unit indicate several reasons for the lack of an actual impact from the pipeline on the traffic passing through the canal — especially the export of crude by the UAE, Saudi Arabia and Kuwait to the Asian market.
The statistics of the oil trade crossing the canal also show that there is no reason to fear the competitiveness of the pipeline if it is operating.
The UAE oil trade represents about 0.7 percent of the total oil traffic passing through the canal; Saudi Arabia’s 4.9 percent, and Kuwait’s 1.4 percent.
Periodic reports indicate an increase in the proportion of trade in petroleum products crossing the canal to 14.2 percent, in contrast to the decline of crude oil to about 8.8 percent of the volume of trade passing through the canal.
The authority’s economic unit monitors expect an increase in the costs and time of transportation using the pipeline instead of the Suez Canal, especially since that trade is mostly directed to northwest Europe and will need to be shipped on tankers in the Mediterranean, in addition to an increase in the time used for unloading and shipping.
The Suez Canal Authority indicated that the revenue generated during 2020 amounted to about $5.61 billion and that the canal also recorded the crossing of 18,829 ships with a total net tonnage of 1.17 billion during 2020, which is the second-highest annual tonnage in the history of the canal, despite the coronavirus pandemic.
The Cabinet statement clarified that the canal revenues come from a variety of sources — the revenues from container ships represent about 50 percent of the canal’s total revenue, while the percentage of dry bulk vessels represents about 17 percent, liquefied natural gas about 5 percent, car carriers about 4 percent, petroleum products and all kinds of chemicals about 12 percent, while crude oil revenues represent 6.4 percent and other types of ships 5.6 percent.