No Resolution to Algoa Bay Bunkering Dispute Likely in January

No resolution to the customs and regulatory dispute that has all but shut down supply at South Africa's largest bunkering location is likely to emerge in January, according to the country's Maritime Business Chamber.

Supply at Algoa Bay was all but shut down in mid-September after the South African Revenue Service (SARS) detained five vessels including bunker barges earlier in the month.

This halted the bunker operations of TFG Marine and Minerva Bunkering.

This was followed by one of BP's barges at Algoa Bay also being detained later on in September.

SARS wrote to local shipping industry representatives in July to announce the findings of a longstanding investigation into the Algoa Bay bunker supply market.

The authority's accusation is that marine fuel cargoes have been delivered from other countries into floating storage facilities off Algoa Bay and sold on as bunkers without first having been properly registered and taxed as imports, rather than transshipped product.

It remains unclear whether this accusation was also being levelled at BP.

There is currently no sign of the dispute being resolved in the immediate future, Unathi Sonti, executive chairperson of South Africa's Maritime Business Chamber, told Ship & Bunker on Wednesday.

"SARS has issued out a document for comment on Customs and Excise Act, 1964 where comments are due by 12th January 2024," Sonti said.

"I don't see the resolution coming out by end-January, looking at how SARS and the government at large have handled this matter, since we brought it to the attention of the Office of the President in September.

"We believe had South Africa had a Ministry of Maritime Affairs this matter would have been addressed differently with urgency."

The timing of the dispute is highly unfortunate for South Africa's bunker industry, as the current security problems in the Red Sea are set to deliver the highest potential marine fuel sales the country has seen in years.

Shipping companies representing a significant proportion of the global fleet are now rerouting vessels away from the Red Sea and Suez Canal to avoid attacks, sending them on longer voyages around Africa instead, and ports across Africa are reporting increased bunker enquiries as a result.

Algoa Bay is the best-placed South African bunkering location to cater to this increased demand, but suppliers there are currently not in a position to take advantage of the situation.

South Africa saw about 328,000 mt of bunker sales in the third quarter of this year, according to Ship & Bunker and 2050 Marine Energy's market survey, down from an average of about 395,000 mt per quarter over the previous three years.

Before the current dispute, Algoa Bay was generating around 80,000 mt/month of bunker sales.