The Airports Company SA (Acsa) says the fuel industry has assured it of regular jet fuel supplies through to at least the start of December, as the SA Revenue Service (Sars) and concerned Jet A-1 fuel suppliers continue to engage to bring an end to a licences matter.
Acsa said though Sars and the affected Jet A-1 Suppliers continued to work towards a solution and the company was guaranteed a supply of jet fuel until the beginning of December, it was ready to help secure a speedy resolution and implement a long-term solution that would prevent any operational disruptions “especially as we approach peak travel season.”
“We have received assurances from the fuels industry that the current supply plans... will ensure that OR Tambo International Airport continues to receive its normal fuel supply until at least the beginning of December,” Acsa said.
“By that time, it is expected that a resolution would have been reached between the parties,” it said.
The Fuels Industry Association of SA earlier warned that a jet fuel shortage ahead of the busy peak festive season could hamper SA’s busiest airports, including King Shaka International and OR Tambo International.
To prevent a kerosene shortage crisis as temporary licence expiration dates approach, the industry organisation urged Sars and the finance minister to expedite the issuing of aviation kerosene import storage facility permits, or to extend temporary ones.
“The Fuels Industry Association of SA urgently calls on the minister of finance to instruct Sars to extend temporary licences for at least 12 months or until the necessary permanent licensing is finalised to avert a supply crisis,” the association said.
“Without immediate action to either extend the temporary arrangements or issue permanent licences, SA risks a severe aviation kerosene supply shortage to OR Tambo and King Shaka international airports and other airports directly supplied from Durban.”
The warning comes ahead of the peak festive season. It is set to compound the challenges already facing the local aviation sector since July, after the suspension of instrument flight procedures by Air Traffic and Navigation Services, which led to disruptions of certain flight approaches at some smaller airports in SA.
Fuels Association executive director Avhapfani Tshifularo said companies that applied for licences included Engen, Sapref, Shell and BPSA, adding that the looming expiration date for Shell was October 20. The expiry dates for the other companies were unconfirmed.
“It appears if things are not done soon OR Tambo could be having issues with stock in about mid-December,” Tshifularo told Business Day.
The industry body, which represents the collective interests of the SA fuels industry, said the challenge arose after the termination of operations at Durban refineries, when Sars insisted during 2023 that affected parties should license their facilities in terms of the Customs and Excise Act.
The Durban-based Sapref refinery previously supplied 35% of SA’s refining capacity. Established in 1963 as a 50/50 joint venture between BPSA and Shell Downstream SA, the facility was shut down in 2022 due to tougher government-imposed fuel regulations.
The bulk of SA’s kerosene imports comes from the Middle East.
On Thursday, the fuel association said that while Sars granted temporary licences for the importation of aviation kerosene in the interim, those were set to expire in October without any indication of what will transpire when the deadline clocks.
“Sars has yet to finalise the permanent licensing of these facilities, despite previously indicating that the process could be completed in a much shorter time frame,” the association said. “Local companies cannot be expected to import without regulatory approval and the regulatory uncertainty places the planning and the economic supply of aviation kerosene under pressure.”
The industry body called for an urgent revision of the act. It said the current regulatory constraints resulting from the act made it difficult to sustain local business or allow new entrants into the market.
The association said regulatory delays in the licensing of import storage facilities put the supply of aviation kerosene under severe threat. It warned that without immediate intervention, a fuel shortage could disrupt operations at airports.
Moreover, a kerosene supply shortage also has ramifications for the airline industry, which would take steps to avoid potential stockouts by cancelling scheduled flights, the association said. This would inconvenience passengers and cause serious doubt about the reliability of local airline traffic.
SA’s airports have been under pressure after the pandemic, battling a string of regulatory and operational obstacles, which have led to flight disruptions, leaving passengers frustrated.
The airports operator, Acsa, said though Sars and the affected Jet A-1 Suppliers continued to work towards a solution and the company was guaranteed a supply of jet fuel until the beginning of December, it was ready to help secure a speedy resolution and implement a long-term solution that would prevent any operational disruptions “especially as we approach peak travel season.”
“We have received assurances from the fuels industry that the current supply plans, which account for the ongoing discussions, will ensure that OR Tambo International Airport continues to receive its normal fuel supply until at least the beginning of December,” Acsa told Business Day. “By that time, it is expected that a resolution would have been reached between the parties.”
In a statement on Monday Sars said: “Sars wishes to clarify that the demand for both aviation kerosene and illuminating kerosene in the republic is met by the supply from licensed fuel manufacturers and importation.”
Since 2022, some of the coastal refineries have stopped refining jet fuel for various reasons, including the destruction of infrastructure, and relied on importation to meet the demand. During April 2024, some of the refineries applied for and were granted temporary special storage warehouse (SOS) licences for the storage and subsequent distribution of imported aviation kerosene to OR Tambo International Airport and other airports. This was done to avert an aviation kerosene shortage that was the result of the statutory maintenance of certain refineries.
“The licences granted were for a specific period, and under specific conditions at that time. These licences were granted on the premise that the institutions would follow the formal process for licensing and have the necessary facilities in compliance with the customs and excise legislation. The special customs and excise warehouse ensures control of goods and enables Sars to protect the state revenue,” said Sars.
“Sars has endeavoured to provide clarity and certainty to the relevant entities that are transitioning from a manufacturing-based model to an import model. Importantly, Sars will be engaging with industry to announce a solution to immediately implement measures that will address the current challenges while ensuring that the provision of the law is upheld.”
Update: October 15 2024
This story has been updated.
With Carin Smith
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