Potential Jet Fuel Crisis Looms at South African Airports Due to Tax Dispute

South African airports, particularly Johannesburg's OR Tambo International Airport, face a potential jet fuel shortage as a tax dispute between the South African Revenue Service (SARS) and petroleum companies threatens to disrupt supply. The Airports Company of South Africa (ACSA), which manages the country's main airports, is actively involved in resolving this issue.

The crux of the problem lies in a tax disagreement regarding the multi-product pipeline that runs from Durban to Johannesburg, including its associated storage facilities. This dispute comes at a particularly vulnerable time as the inland refinery, a primary jet fuel source for Johannesburg OR Tambo, is slated for a temporary shutdown scheduled between May and June 2024. This has heightened reliance on imported fuel, with the airport's fuel stock levels recently falling below the recommended five days' buffer.

ACSA has been engaged in discussions with SARS, the South African Petroleum Industry Association (SAPIA), and individual petroleum companies to devise and finalize contingency plans. "This planned shutdown unfortunately coincides with the challenges posed by the SARS impasse with the parties. This is the reason for the potential crisis in jet fuel supply," stated an ACSA spokesperson.

The impending refinery shutdown has already prompted some airlines to adjust their operations in anticipation of possible fuel shortages. These operational decisions are crucial to planning for the impacts of reduced fuel availability at South African airports. ACSA is communicating continuously with all stakeholders involved and has requested patience until a resolution is reached.

The dispute, as explained by SAPIA Executive Director Avhapfani Tshifularo, centers not only on tax issues but also on the procedural aspects of fuel transportation, particularly Duel Purpose Kerosene (DPK), which has applications beyond aviation. "The processes that we had in the past have not been aligned to a sort of 'import mode'. And if you don't move product according to the SARS procedures, you can be penalized," Tshifularo told News24.

This situation underscores the challenges faced by the South African aviation sector as it navigates both infrastructure and regulatory hurdles. With the closure of key refineries like Durban's Enref and Sapref, the country's dependency on imported fuels has increased, exposing gaps in local processes and procedures that are yet to be aligned with current import practices.