South Africa’s aviation sector receives a critical lifeline as tax authorities extend special import licences, preventing potential jet fuel shortages that could cripple the country’s busiest airports. This strategic intervention demonstrates government recognition of the aviation industry’s vulnerability following years of refinery closures and supply chain disruptions.
How FIASA members secure continued aviation fuel imports
The extension provides essential breathing room for airlines and airport operators who have struggled with fuel security since losing half the country’s refining capacity. Without this relief, O.R. Tambo International Airport and other major hubs faced imminent supply crises that could have grounded flights and devastated the tourism economy.
South Africa’s fuels industry body FIASA on Friday welcomed a year-long extension from tax authorities to special licences for importing and storing jet fuel, helping to avert a potential supply crisis at major airports.
The Fuels Industry Association of South Africa (FIASA) said the arrangement meant its members could operate special storage warehouse (SOS) licences until October 31 next year.
The extension allows for continued imports of aviation kerosene, which will be stored in licensed tanks and pumped into the multi-product pipeline for supply to O.R.Tambo International Airport, one of Africa’s busiest passenger hubs.
The licence extension from the South African Revenue Service (SARS) also covers the separate importation and storage of illuminating kerosene, mainly used in household cooking.
The comprehensive nature of this extension reflects SARS’ understanding that fuel security extends beyond aviation to include essential household energy needs, particularly in communities that rely on kerosene for cooking and heating purposes.
South Africa’s refinery capacity loss threatens airport fuel security nationwide
“The extension is a critical intervention in safeguarding South Africa’s security of supply, particularly for the aviation sector and communities that rely on illuminating kerosene,” FIASA said in a statement.
The importation and movement of both aviation kerosene and illuminating kerosene are governed by South Africa’s Customs and Excise Act, and its provisions needed to be strictly adhered to, SARS said previously when granting SOS licences last year.
A net importer of refined petroleum products, South Africa has lost around half of its refinery capacity over the last five years, curtailing the provision of jet fuel to airports and leading to shortages.
Emergency measures prevented Tambopata Airport from running out of fuel
In January this year, the national transport department took extraordinary measures in securing just over 121 million litres of jet fuel for O.R. Tambo airport after a fire at the Natref refinery caused it to shut down operations.
South Africa’s only inland refinery, majority-owned by Sasol SOLJ.J, the Natref crude oil refinery is one of the main suppliers of jet fuel to domestic airports.
The January crisis at O.R. Tambo Airport highlighted the precarious nature of South Africa’s fuel supply chain, where a single refinery incident can threaten the entire aviation network and force government intervention to maintain operations.
Government intervention protects the aviation industry from supply chain vulnerabilities
The active status of the government in already issuing these licences indicates that the government is now reasoning differently, giving credence to the fact that aviation fuel is a critical asset that needs special protection in the form of a special regulatory licence. This shift in policy is an appreciation that conventional market dynamics cannot be solely relied upon to ensure fuel security in a nation that has reduced its refining capacity and which can only augur better at imports.
The effectiveness of these emergency response efforts has created a blueprint for future crisis management of the South African aviation industry, which means that the industry will be able to sustain its operations even when local manufacturing industries are disrupted due to unforeseen disruptions to these facilities or when they fail to meet the necessary capacity.
GCN.com/Reuters