The International Trade Administration Commission of South Africa (Itac) confirmed on Friday that its recommendation that a rebate provision be introduced to cater for the duty-free importation of petroleum bitumen, which had been in short supply in recent years, had been implemented by the South African Revenue Service (Sars).
Bitumen, Itac argued, was considered a critical material for infrastructure development in the Southern African Customs Union (Sacu), but there was currently a supply shortage representing about 20% of the Sacu demand.
A by-product of crude oil refining, bitumen is used primarily as a binder, which is mixed with aggregate particles to create asphalt concrete for use in road construction.
The four refineries in the Sacu have historically refined the majority of the bitumen used for road construction and maintenance in the region.
Following an analysis, Itac found that the importation of bitumen, over and above the 10% import tariff, had significant additional cost implications, as it required expensive specialised equipment and storage facilities.
However, imports of bitumen had increased from roughly 150 000 kg in 2009 to more than 17-million kilograms in 2012, owing to the shortages.
To balance the interests of the domestic producers with those of industrial users and importers, the commission recommend a rebate of duty facility, administered by means of a permit system, ahead of a straight reduction in the duty.
The rebate would provide a customs duty waiver to ensure availability at globally competitive prices.
Itac could also, through a permit system, stipulate quantities, timeframes and conditions. It would also monitor the supply and demand conditions, with the aim of launching a review of the tariff structure three years after implementation.