South Africa

South Africa faces jet fuel crisis

Airports Company South Africa (ACSA) confirmed a risk of an impending fuel shortage at some airports but said it has implemented contingency plans.

IOL reported that OR Tambo International Airport could face another fuel supply challenge in the coming weeks if the dispute between fuel suppliers and the South African Revenue Service (SARS) over duties is 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,” the publication reported.

ACSA explained that it was requested to assist on behalf of the South African Petroleum Industry Association (SAPIA) with an ongoing engagement with the South African Revenue Service (SARS).

The engagements are between SAPIA, SARS, and individual petroleum companies to resolve a tax dispute relating to using the multi-product pipeline from Durban to Johannesburg and related storage facilities. 

Concerned about the fuel shortage’s negative impact on its airport operations, ACSA has participated in deliberations with these parties.

ACSA explained that the inland refinery, which is also the main source of jet fuel into OR Tambo, is preparing for its planned temporary shutdown sometime between May and June this year.

This leads to a greater reliance on imported fuel from Durban. “These eventualities have been anticipated, and jet fuel supply will continue, using the said alternative routes,” ACSA said.

“This planned shutdown, unfortunately, coincides with the challenges posed by the SARS impasse with the parties.”

ACSA said this is the reason for the potential crisis in jet fuel supply.

However, ACSA, SARS, and SAPIA have been discussing and finalising implementing the contingency plans to avert the situation.

It confirmed that the overall fuel stock levels at OR Tambo 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.

“At this stage, ACSA is communicating with all parties as they are attempting to resolve these matters and requests patience from stakeholders until we receive firm feedback from SARS, SAPIA and the petroleum companies on the resolution of this matter.”

“ACSA would like to emphasise once again that the responsibility to keep adequate stocks of jet fuel to meet the demands of airlines lies with the fuel suppliers and SAPIA using ACSA’s infrastructure.” 

It said airlines forecast their demand accurately, 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.”

“ACSA is in constant engagement with SARS, SAPIA, fuel suppliers and the airlines directly to obtain up-to-date information on the actions they are taking to deal with and mitigate this potential crisis.”


Top JSE indices