Egypt to Raise Suez Canal Transit Fee in 2008

12-31-2007

Egypt will raise the cost of crossing the Suez Canal by an average of 7.1 percent starting in April to take advantage of an increase in seaborne trade from Asia.

Transit fees for oil tankers will rise 7.3 percent. Container ships will pay 5.7 percent more, while the cost for liquefied natural gas tankers will increase 10.5 percent, Ahmed Fadel, chairman of the Suez Canal Authority, told a press conference in the northeast city of Ismailia today.

``We expect the economic boom in India and China to continue, and that will translate into more seaborne trade,'' Fadel said. ``With the continuous rise of oil prices, the Suez Canal will remain the cheapest route for ships.''

The authority, whose canal links the Red Sea to the Mediterranean, is boosting ties with U.S. East Coast terminals including the Port of Virginia in Hampton Roads before the Panama Canal completes a seven-year, $5.2-billion expansion that will increase its capacity. More than 18,000 ships crossed the Suez Canal last year, compared with an annual average of 14,000 for Panama.

China's exports to the U.S. rose to $287.8 billion in 2006 from $100 billion in 2000, according to the U.S. Census Bureau. Suez handles less than 6 percent of the containers traveling between Asia and the U.S., with the rest going to the West Coast, where they are carried inland by rail and truck or transferred to smaller ships able to navigate Panama.

Trade from Asia increased Suez's container tonnage 19 percent in the year ended in November, bolstering revenue by 20 percent to a record $4.2 billion.

Oil prices gained 2.9 percent this past week and have risen 59 percent from a year ago. Crude is heading for its biggest annual gain in eight years.

The Suez Canal is the world's busiest waterway. It is among Egypt's largest foreign-currency earners. As much as 8.2 percent of the world's seaborne trade passed through the canal last year.