SARS releases final rules for South Africa's offshore bunkering

The South African Revenue Service’s (SARS) new protocols will be implemented from 30 November, a shipping agent told ENGINE. 

PHOTO: Algoa Bay is adjacent to Port Elizabeth on the South African coastline. Getty Images

SARS' latest move paves the way for bunkering to resume off Algoa Bay, which has been shut for more than a year now. Yet, concerns and uncertainty remain in the market over how soon bunkering could restart in Algoa Bay.

"At this stage, there has been no confirmation of re-opening, nor have we witnessed any movements of bunker barges back into Algoa Bay," the shipping agent stated, adding that there are currently no bunker barges present in Algoa Bay.

Amendments have been introduced under sections 21, 60, and 120 of the Customs and Excise Act. Some amendments pertain to the storage of imported bonded fuel goods in designated customs and excise storage warehouses.

Durand Naidoo described the new regulations as strict. “The new requirements are stringent, including a mandatory requirement for flow meters, which will significantly increase CAPEX investments for operators.” Naidoo wrote in a LinkedIn post. He is the chief executive of the South African shipping firm Linsen Nambi.

The amendments also outline two types of bunker storage warehouses -"land-based bonded fuel goods special storage warehouse” and “sea-based bonded fuel goods special storage warehouse” -  for offshore transfers. It also sheds light on how custom duties will be applied for offshore bunker transfers. 

Unathi Sonti, executive chairperson of the Maritime Business Chamber has welcomed the development saying it is long overdue. “While [Algoa Bay] bunkering is to resume there are some additional things that must happen. SARS has promised us an industry workshop to unpack the new regulations,” Sonti said. 

Bunkering off Algoa Bay has been at a standstill since September 2023, when SARS suspended offshore bunkering after detaining five bunker barges over import duty disputes. The vessels were diverted to other nearby bunker ports, such as Durban and Richards Bay.

SARS had intermittently released draft amendments to the Customs and Excise Act throughout the year and called for feedback, but never provided a date for when offshore bunkering would resume in Algoa Bay.

By Manjula Nair

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