On 15 October 2024, the South African Revenue Service (SARS) issued a media release in which it indicated that on 14 October 2024, it had engaged with industry to avert fuel shortages at all airports and that it wished to announce the following:
“After careful consideration, the SARS Commissioner has granted special permission for the importation of kerosene fuel from 21 October 2024 until 20 October 2025. The special permission is granted to allow parties to attend to the complexities involved in the process of the deregistration of manufacturing warehouses and reregistration of affected storage facilities.
The Commissioner requests 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 involved will be communicated with individually, in line with their applicable circumstances. SARS believes that this announcement will bring certainty to the industry, which will benefit the country’s economy and enable everyone to travel smoothly.”
For additional context, SARS also issued the following Media Release on 14 October 2024:
SARS has noted media statements alluding to the pending shortage of jet fuel, known as kerosene, due to what is purportedly SARS’ dithering to issue licences to fuel companies. This is an incorrect position. The importation and movement of both aviation kerosene and illuminating kerosene is strictly governed by the Customs and Excise Act 1964. It is the adherence to the provisions of the Act, 1964 that has proven difficult for the fuel industry.
SARS wishes to clarify that the demand for both aviation kerosene and illuminating kerosene in South Africa is met by the supply from licensed fuel manufacturers (‘refineries’) and importation.
Since 2022, some of the coastal refineries have stopped manufacturing for various reasons, including 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 ORTIA and other airports. This was done to avert an impending crisis of the shortage of aviation kerosene that was occasioned by 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's revenue.
SARS has endeavoured to provide clarity and certainty to the relevant entities that are transitioning from a manufacturing-based model to an import model. In this regard, SARS has been assisting and guiding the entities to continue to trade within the bounds of the law while adhering to the necessary governance processes.
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. It is in SARS’ interest that the country’s economy and travelling are not impeded in any way. It is equally important that all the role players should also act expeditiously in meeting their obligations.