Egypt Charges Large Crude Carriers Coming from the Arabian Gulf with $155,000

 Egypt’s Suez Canal Authority has announced on its website new toll rates for oil tankers that have gone into effect and will last for a six-month experiment.

Very large crude carriers (VLCCs) crossing the canal from the Arabian Gulf after discharging at the SUMED oil pipeline will be charged $155,000 if they are carrying more than 250,000 in deadweight tonnage. Moreover, the VLCCs are to pay $230,000 on their return ballast trip.

Suez Canal is one of Egypt’s major sources of foreign currency. Egypt’s economy has witnessed an unprecedented decline during the last two years. The economy has faced major hits due to the withdrawal of tourism and foreign investments which were among the main sources of foreign currency.

In 2015, Abdel-Fattah el-Sissi inaugurated an $8 billion expansion of the canal that aimed to double the daily traffic and increase the annual revenue to more than $13 billion by 2023. However, the Suez Canal revenues have fallen for three consecutive months to record  $401.4 million in February, according to official data from the canal’s authority showed.The revenues slowed from $411.8 million in January and $429 million in December last year, meaning that the last three months have seen revenues fall by a total of USD 27.6 million.

The drop in revenues comes as a result of claims that ships are shifting their routes from the Suez Canal to the Cape of Good Hope at the southern tip of Africa due to the global fall in oil prices, according to SeaIntel Maritime Analysis.

SeaIntel Analysis reported that vessels sail south of Africa instead of through the Suez Canal and Panama Canal to save money. It stated in its latest report,”Since the end of October 2015, 115 vessels deployed on Asia-USEC and Asia-North Europe services have made the back-haul trip to Asia by sailing south of Africa instead of their routing on the head-haul. There were also plans to switch more Asia-North Europe sailings to the south of Africa routing in the coming weeks.” SeaIntel report considered the change of routing as a major problem to the Suez Canal, saying, “While the change of routing of some Asia-North Europe services (backhaul) to south of Africa is a blow to the Suez Canal.