RIYADH: Egypt’s Suez Canal Authority expects the canal's revenues to rise by about $700 million annually as the transit fees for all types of ships to be increased by 15 percent by January 2023, the chairman and managing director told CNBC Arabia.
“The size of the share that will be offered from the channel will range from 10 percent to 15 percent,” Osama Rabie said.
The decision to increase the transit fees was taken to deal with the impact of global inflation.
He added: “The rise in global inflation rates by eight percent led to an increase in the cost of maintenance and operation within the canal.”
Rabie said that transit fees for both dry bulk vessels and cruise ships will increase by 10 percent.
The increase in fees is attributed to the rise in energy prices, freight rates and daily time rental values, according to the cabinet statement.
Rabie reasoned that the rise in fees for passing the canal “is inevitable and a necessity” to deal with the impact of the current global inflation rates that have exceeded eight percent.
It comes in light of “unprecedented” daily increases in charter rates for most types of vessels.
Daily charter rates for crude oil tankers increased on average by 88 percent in 2022 over the last year, while daily charter rates for liquefied natural gas carriers rose on average by 11 percent this year, compared to the previous year.
Rabie explained that the most important factor in determining Suez Canal transit fees is the average freight rates for various types of ships.