Suez Canal continues clawing back pandemic price cuts
Suez Canal transit fees are set to increase by 6% for most ships starting February 2022, as the Suez Canal Authority looks to capitalize on rising traffic, which it expects to increase by almost 7% next year, according to a statement on Thursday. The increase exempts LNG and cruise ships, which will continue paying the same discounted tariffs as now. The SCA will continue “to apply a balanced and flexible marketing and pricing strategy that fulfills the authority and its clients’ interests and takes into account the global economic conditions,” authority head Osama Rabie said.
The SCA is starting to dial back its pandemic discounts: The authority last month slashed discounts it had been giving LNG carriers to 15% from 25%. The SCA sees an opening to start restoring prices after cutting them to keep market share when the price of oil fell in the early days of the pandemic. The rise in oil to record highs to cross USD 85 a barrel for the first time since 2014 amid a global energy shortage is driving higher demand for natural gas and other fuels, while record high freight charges are also boosting income for shipping lines.
The authority had been offering reduced fees to boost traffic through the canal, slashing fees for tankers at the end of 2020 and some container ships at the beginning of July, and freezing transit fees for all ships at 2020 rates.
Canal revenues hit a record USD 5.84 bn during the last fiscal year, and receipts are expected to inch up further to an estimated USD 6.6 bn in FY2021-2022, and USD 7.6 bn by FY2024-2025.