Acsa in talks to resolve jet fuel supply tax dispute

Airlines taking off from OR Tambo International Airport, which is owned and operated by Acsa. File photo

Airlines taking off from OR Tambo International Airport, which is owned and operated by Acsa. File photo

Published Apr 12, 2024


Airports Company South Africa (Acsa) has confirmed it is talking with relevant parties in a bid to resolve the ongoing tax dispute between fuel suppliers and the SA Revenue Service (Sars), which could potentially impact supplies of jet fuel at OR Tambo International Airport.

Business Report (BR) reported on Monday that the busiest airport in Africa could face yet another fuel supply challenge in the coming weeks if the dispute between fuel suppliers and the tax revenue collector over duties was not resolved speedily.

According to sources close to the situation, stocks of jet fuel at the Acsa fuel farm in Kempton Park noticeably declined in the past week to below the acceptable benchmark of five-days supply.

In a statement to BR yesterday, Acsa said that it was asked to assist on behalf of the SA Petroleum Industry Association (Sapia) – which represents the collective interests of the SA liquid fuels industry – and individual petroleum companies.

Acsa said it was speaking to various parties in a tax dispute relating to the use of the multi-product pipeline from Durban to Johannesburg, and related storage facilities, as it was concerned about the impact of a fuel shortage on its airport operations.

“The problem can be best summarised as follows: The inland refinery, which is also the main source of jet fuel into OR Tambo International Airport, is preparing for its planned temporary shutdown sometime between May and June this year, leading to a greater reliance on imported fuel from Durban,” Acsa said.

“These eventualities have been anticipated and jet fuel supply will continue, making use of the said alternative routes. 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, and as indicated Acsa, Sars and Sapia have been discussing and are finalising the implementation of the contingency plans to avert this situation.

“While the overall fuel stock levels at OR Tambo International Airport recently dipped below the recommended five days’ cover due to the refinery preparing for the shutdown, the five-day stock holding of fuel provides a buffer to deal with any unforeseen short-term interruptions that may occur in the jet fuel supply chain.”

Acsa emphasised that the responsibility to keep adequate stocks of jet fuel to meet the demands of airlines lay with the fuel suppliers and Sapia, using Acsa’s infrastructure.

The tax dispute between fuel suppliers and Sars is not an uncommon occurrence, but it has mostly played itself out within the shipping industry.

In September, Sars detained at least five vessels involved in the fuel bunkering supply chain at the Algoa Bay anchorage off Port Elizabeth for allegedly contravening tax laws over alleged illegal offshore bunker operations.

Meanwhile, Acsa said it was in constant engagement with Sars, Sapia , fuel suppliers and the airlines directly to obtain up-to-date information on the actions they were taking to deal and mitigate this potential crisis.

Airlines forecast their demand accurately and make arrangements to supply this demand, and enter into contracts with fuel suppliers. Sapia and the Department of Mineral Resources and Energy have a responsibility to ensure continuity and security of supply.

“As a result, some suppliers have indicated to their airline customers that due to the above matter, there will be a reduction in their supply and airlines are taking operational decisions to plan for this impact on their services.”