3 factors drove the Suez Canal to reduce the package of transit cuts

The “Russo-Ukrainian” war, which erupted earlier this year, has caused a state of suffocation in the international trade movement, coupled with the increase in global demand for transportation, and the rise in freight rates, according to the report of the United Nations Conference on Trade and Development (UNCTAD) in June 2022.

In light of these global changes, the Suez Canal Authority has decided to reduce some of the reduction rates offered to shipping companies crossing the Suez Canal navigation lane, due to 3 main factors, by 5% in line with the global trade movement, especially with the change in the gas transportation map.

The self-sanctions imposed by European companies on Russian crude oil diverted flows to Asia, and as a result, seaborne Russian crude oil exports recovered from its western ports to Asian countries, passing through the Suez Canal.

This recovery was confirmed by statistics from the Suez Canal Authority, which revealed that the transport of petroleum and its derivatives during May 2022 recorded the transit of 533 tankers compared to the same month in 2021, which reduced the transit of 418 recorded. tankers, while the loads of crude oil and its derivatives during May 2022 amounted to 25 million tons compared to the transportation of Amounts recorded 17 million tons.

According to UNCTAD, the rise in energy costs has led to a rise in marine fuel prices, and hence the rise in shipping costs in general.

In the same context, “Al Mal” monitored the incentives approved by the Suez Canal Authority in connection with crude oil tankers coming to and from the ports of the US Gulf and the Caribbean – and destined for or from the ports of the West India comes, at rates ranging from 35% to 75% .The reduction of liquefied petroleum gas tankers between the US Gulf and India 20% of the transit fee.

Abdul-Tawab Hajjaj: The percentage of discount is determined based on the calculation of the cost of the trip

Dr. Abdel-Tawab Hajjaj, economic adviser to the former head of the Suez Canal Authority, said the granting of discounts to shipping companies aims to attract ships that take alternative routes other than the Egyptian shipping route, particularly the Cape of Good Hope, and explains that dr. the percentages of reduction are determined based on the calculation of the cost of operating the ship’s transit journey through the canal.Suez, compared to other alternative canals, which takes a long time without paying transit fees.

He added that there are many factors to be studied before announcing these cuts, the most important of which are fuel prices and the economy of the trip, and the saving of the ride by crossing the canal, in addition to international variables, especially the Ukrainian war and the Corona pandemic, which caused the prices of the two rivers to rise.

He added that the Suez Canal Authority usually relies on flexible marketing policies, to attract the largest number of vessels to cross the canal, and to attract new customers through various tools, the most important of which is the discounts it gives to long queues in each case.

Maritime transport expert: “Petroleum” is the main element on which the decision is based to determine the facilities granted to tankers

Dr Ahmed El-Shamy, a maritime transport expert, agreed with his predecessor that oil prices are the main element in the government’s decision on cuts, whether it is fixed, reduced or increased, and explains that transport costs are based on fuel prices, and how the higher the prices, the better the choice.Cross the channel, and therefore fewer cuts.

Recent official data has revealed that the Suez Canal Authority’s revenue has risen to record levels during the recent period, with revenue reaching around £ 11.6 billion in the month of April, up from £ 8.7 billion in the corresponding month in 2021 was, an increase. of £ 2.9 billion, recorded an increase of 33%.

According to data released by the Central Agency for Public Mobilization and Statistics in Egypt, the revenue of the Suez Canal has developed significantly since last year, as the total value of revenue during the period from April 2021 to last April is approximately 115.7 billion. .

Director of the Office of the Golf Secretary in Alexandria: International trade is under pressure and needs more facilitation

Sherif Al-Bandari, Director of the Gulf Agency Office in Alexandria, believes that the cuts granted to shipping companies by the Suez Canal Authority are a successful policy, and points out that the coming period needs more incentives, as a result from exposing the volume of international trade to more pressure due to the repercussions of the Russian war and inflation, except Some internal procedures, such as documentary credits, negatively affected shipments.

In the same context, Shell warned about the temporary turmoil of liquefied natural gas due to the closure of the Prelude FLNG liquefied petroleum gas plant in Australia, and the poor flow of Russian gas, while the state of Qatar is expanding its production capacity through the North Field project at a cost of $ 30 billion To increase the country’s liquefied natural gas production capacity from 77 million tons annually to 110 million tons.

The Suez Canal Authority has decided to renew the incentives offered to liquefied natural gas tankers operating between the US Gulf, the Arabian Gulf and India at rates ranging between 55 and 70 percent.

Informed sources confirmed that 70% of the fleet of liquefied natural gas tankers transported from the Suez Canal is dependent on the use of combustible evaporated natural gas (BOG) as fuel, compared to 30% which is dependent on low sulfur fuel (VLSFO) in the operation process.

Osama Rabie, head of the Suez Canal Authority, said in previous statements that the Russo-Ukrainian war has so far positively affected the Suez Canal, due to the transport of gas ships coming from the Gulf to Europe, instead of Russian gas because it the safest and shortest route.

Maritime transport expert: “Petroleum” is the main element on which the decision is based to determine the facilities granted to tankers

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