Jet fuel dispute with Sars could lead to shortage of supplies

OR Tambo International Airport. Picture: Itumeleng English/ Independent Newspapers

OR Tambo International Airport. Picture: Itumeleng English/ Independent Newspapers

Published Apr 8, 2024


OR Tambo International Airport could face yet another fuel supply challenge in the coming weeks if the dispute between fuel suppliers and the SA Revenue Service (Sars) over duties is not resolved speedily.

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

The challenge of low fuel stock at airports in South Africa has recurred frequently over the past two years due to multiple factors, including flooding, load shedding and geopolitical tensions.

Acsa has not yet confirmed the impending crisis, nor explained what the impact was likely to be on flights in and out of the busiest airport in Africa, but sources on Friday said that resolving the issue rested with other role-players and not Acsa.

However, domestic airlines on Friday downplayed concerns about dwindling jet fuel stocks.

South African Airways (SAA) spokesperson Vimla Maistry forwarded our query to Acsa for response, but Acsa did not immediately respond to questions.

Airlink’s chief executive and managing director Rodger Foster said there was no shortage of fuel at OR Tambo International Airport at present, and all Airlink flights were operating normally.

“However, Airlink is aware of a current dispute between fuel suppliers and Sars over duties on the transfer of fuel from Durban to OR Tambo through the multiproduct pipeline,” Foster said.

“Nevertheless, we are optimistic that the role-players will reach a speedy solution that averts any disruption to our business and to our customers’ travel and air cargo shipments.”

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.

Offshore bunkering is when ships anchor and are refuelled by bunker barges (refuelling ships) instead of refuelling in a port.

A key advantage of offshore bunkering is that ships do not need to queue for a berth in the port, reducing delays and logistics costs, while still being close enough to the shore to replenish other supplies if needs be.

Other sources with intimate knowledge of the issue had pointed to Transnet’s logistical challenges as reasons for delays of jet fuel supply.

However, Transnet Pipelines and Sars had both not responded to questions by the end of the weekend.

FlySafair chief marketing officer Kirby Gordon said the shortages in question did not really pose a direct threat to the airline as they impacted another supplier, rather than the supplier that FlySafair was contracted to.

Gordon said that when they had experienced shortages in the past, notices had been issued to require those airlines to stop at alternative airports to pick up enough fuel to complete their journeys elsewhere.

He said when these fuel shortage threats occurred, there were a few things airlines could do to protect their operations.

“This first thing is that we do what we call “tankering”. So what we do is fill up our tanks with fuel at a departing airport that has a good fuel supply, and then we fly to Johannesburg with a full tank,” Kirby said.

“When on the ground in Joburg we would then top up the tank to do the next flight. This is not ideal because it is ultimately wasteful of fuel and expensive – the reason is that you need to burn fuel to carry the fuel that you need for your return flight.

“This impacts our operating costs significantly and is bad for the environment, but sometimes it’s the only strategy. The key to using that strategy is a fair warning on low supplies because we would still need to top up, so we can make supplies last at the airport that’s in trouble.”

Transnet Freight Rail's (TFR) head of communications, Mary Papayya, told Business Report, "TFR is currently running two (2) trains per week of jet fuel to OR Tambo International Airport (ORTIA) due to low activities and or demand from the airlines. Given that OR Tambo International (ORTIA) also receives fuel from Transnet Pipeline, TFR has had to balance out their requirement versus how rail and pipeline, share the supply.

"The next supply for ORTIA is on route currently (Close of Business Friday, 5 April 2024) and will supply ORTIA with 20 loaded Rail Tank Cars (RTCS) of fuel. The plans, pending the outcomes of discussions with clients could well be increased to five (5) trains per week going forward. The safety stock level given to TFR is five (5) days. As of Friday, 5 April 2024, the stock level per our records reflected 6.4 days."