Egypt Significantly Increases Fees for Passing the Suez Canal. Will Europe Pay More for Goods Delivery?
The Egyptian authorities have announced that passage through the Suez Canal, one of the world's most crucial international waterways, will become considerably more expensive.
This information is reported by Spiegel.
The administration of Egypt's Suez Canal has declared that, starting from January 15, 2024, they will increase the fees for the passage of oil tankers and other large vessels by 15%. This higher charge will apply to tankers transporting oil products, liquid oil, liquefied gas, or chemicals. Container ships, car ferries, and passenger vessels will also be subject to the increased fees.
The Suez Canal is also the shortest maritime route between Europe and Asia. For Egypt, these tolls are a vital source of foreign currency revenues, having generated over $2.5 billion for North African countries in just the second quarter of this year.
According to experts, the sudden increase in prices is unlikely to fuel inflation in Europe, including Germany.
"As an end consumer, you won't feel the increase in transit fees," says economist Vincent Stamer from the Kiel Institute for the World Economy (IfW).
Additional fees are likely to represent only about one to two percent of the total operating costs of a large container ship on the East Asia-Europe route. "Transport costs make up only a small part of consumer prices for imported goods," Stamer notes. "This is especially true since freight rates for the Suez Canal route have sharply declined due to excess capacity."
The Suez Canal is a navigable canal in Egypt that connects the Mediterranean and Red Seas, providing the shortest route for ships to travel between Europe and Asia, rather than circumnavigating Africa or transporting cargo overland.
It's worth noting that the Egyptian Economic Zone of the Suez Canal recently signed a $6.75 billion agreement with China Energy for eco-friendly ammonia and hydrogen projects to be established in the Sokhna industrial zone.
They also signed an agreement with the Hong Kong-registered United Energy Group for the creation of a potassium chloride production complex with expected investments of up to $8 billion.
As reported by The Gaze, the Bulgarian Parliament recently introduced new transit fees for Russian gas passing through the Balkan Stream pipeline, an extension of the Turkish Stream pipeline into Western Europe, with the new tariff set at 200 Bulgarian levs (€10.76) per megawatt-hour of gas transit.