Offshore bunkering operations in South Africa came to a halt in late 2023 after several vessels in Algoa Bay were seized due to a legal dispute over fuel movement regulations under the Customs Act. Recognizing gaps in the law, the South African Revenue Service (SARS) introduced new rules in December 2024 to regulate fuel imports, storage, and exportation, including licensing requirements for operators, the NorthStandard informs.
The Club further provides a circular from Shepstone & Wylie Attorneys and advises operators to ensure they do bunkering operations only with duly authorised and licensed suppliers. The circular discusses the impact of regulatory changes on offshore bunkering (the refueling of ships at sea) in South Africa, particularly in Algoa Bay, and the introduction of new customs regulations to address prior legal uncertainties.
As informed, in September 2023, South African authorities (SARS) detained and seized vessels in Algoa Bay due to a dispute regarding the handling of fuel levy products and residual fuels. This enforcement action was based on provisions in the Customs and Excise Act, 1964, leading to a halt in offshore bunkering operations in the region.
SARS identified a legal gap (“lacuna”) in the Customs Act concerning offshore bunkering, meaning that existing laws did not adequately cover these operations.
To address this, SARS introduced new regulations under the Customs Act in December 2024, which took effect on 30 November 2024.
SARS established a structured system for fuel imports, storage, and exportation:
- Certain petroleum products must be stored in bonded facilities (e.g., floating storage units or FSUs).
- Operators of these bonded facilities (both land- and sea-based) must obtain licenses and meet strict documentation and record-keeping requirements.
- Fuel can be supplied as bunkers to foreign-going vessels, including those classified as “coastal vessels.”
- Companies involved in import/export must register with SARS per section 59A of the Customs Act.
SARS officials now have the authority to inspect vessels of licensed marine removers, ensuring compliance with the new regulatory framework. Despite the regulatory overhaul, reports suggest that Off Port Limits (OPL) bunkering has resumed, following approvals from local authorities. However, these approvals seem to focus on safety (SAMSA oversight) rather than full compliance with SARS’s new customs regime.
