Egypt considers offering discounts of up to 15% on Suez Canal fees

Egypt is mulling offering transit fee discounts ranging from 12% to 15% for ships passing through the Suez Canal, Egypt’s Suez Canal Authority chief, Osama Rabie, told the Egyptian television channel Sada al-Balad television, according to Reuters. 

Suez Canal revenue – a key source of income and foreign currency for the Egyptian economy – fell by more than $6 billion last year as compared to 2023. The dramatic revenue drop was triggered by attacks by the Houthis in Yemen. They began targeting ships in the Red Sea after the war in Gaza erupted in October 2023 in what they say is an expression of solidarity with the Palestinians.

As a result, ships transporting cargo between Asia and Europe have been rerouting their cargo through southern Africa to avoid the Red Sea. 

Egypt is considering lowering its fees in a bid to attract more cargo ships back to the region.

Rabie reportedly said the discounts could be applied days after a ratification by Egyptian President Abdel Fattah al-Sisi. 

Last week, Rabie met with representatives from shipping agencies who called for temporary incentives that would help offset increased insurance costs for vessels operating in the Red Sea, which they deemed a high-risk zone. 

The meeting followed an Oman-mediated ceasefire between the United States and the Houthis, under which the U.S. agreed to stop bombing the Houthis in exchange for a cessation of attacks of U.S. ships in the Red Sea.