By Lehlohonolo Lehana.
The South African Revenue Service (Sars) Commissioner Edward Kieswetter has granted special permission for kerosene fuel to be imported over the next year.
The special permission is granted to allow parties to address the complexities involved in the process of the deregistration of manufacturing warehouses and reregistration of affected storage facilities.
This decision follows engagement between Sars and the industry on October 14 to avert fuel shortages at the country’s airports.
The commissioner has requested all parties to conclude the outstanding work urgently and ensure that all compliance requirements are met and that the current licensing provision, in respect of the importation of kerosene fuel and its derivatives, may be confirmed where appropriate.
Every taxpayer that is involved will be communicated with individually, in line with their applicable circumstances.
Sars says it believes that this announcement will bring certainty to the industry, which would benefit the country’s economy and enable smooth travel.
Last week, industry organisation the Fuels Industry Association of South Africa issued a statement warning that the supply of aviation kerosene is facing a” severe threat” owing to regulatory delays in the licensing of import storage facilities, and without immediate intervention, a fuel shortage could disrupt operations at airports.
The association explained that the industry’s concerns arise from the fact that, under the Customs and Excise Act, the import of aviation kerosene into dedicated storage facilities is subject to stringent licensing conditions.
Following the termination of operations at Durban refineries, Sars said during 2023 that affected parties should license their facilities in terms of the Act.
In the interim, Sars granted temporary, time-bound licensing for the importation of aviation kerosene. The affected parties set about applying for the permanent licensing of their facilities which was completed in February of this year.
Another time-bound licensing arrangement had to be provided, set to expire this month, the association outlined.
However, it pointed out that more than six months later, Sars had yet to finalise the permanent licensing of these facilities, despite previously indicating that the process could be completed in a much shorter time frame.
Without immediate action to either extend the temporary arrangements or issue permanent licenses, South Africa risks a severe aviation kerosene supply shortage to OR Tambo and King Shaka International Airports and other airports directly supplied from Durban.
“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 association then warned.
It explained that this would have ramifications for the airline industry, which could take steps to avoid potential stock outs by cancelling scheduled flights.