insights

Russell Dupuy 14 Feb 2019 By Russell Dupuy

Are you getting what you pay for? Fighting fraud through effective fuel inventory management

When you make any type of purchase, you expect to get exactly what you pay for. But in a business as large and lucrative as fuel, it’s not quite so straightforward.

During fuel delivery, there will always be slight differences between the fuel that’s loaded into the truck and the fuel that makes it into your tank. But this is not always a matter of normal fuel loss – sometimes it’s due to incoming delivery fraud.

Fuel delivery fraud is most common across locations with low incomes, where fuel is valuable and accessible – in particular in Africa and South East Asia.

However, that doesn’t mean you should be turning a blind eye to it.

If your fuel inventory management is lacking and you don’t have full visibility over your stock, you could be losing more than just fuel.

The four forms of fuel loss

Incoming delivery fraud isn’t carried out in just one form, which can make it harder to track or recognise. Generally, there are four known losses that can occur between point of origin and point of destination – some are normal, but some are not.

Normal fuel loss:

Temperature related loss: Your fuel delivery could be coming from 10 minutes down the road, 12 hours down the road or anywhere in between. By the time it reaches you, chances are the temperature of the fuel will have changed from when it was loaded into the transportation vehicle, therefore also changing its volume.

Vapour related loss: As your tank gradually empties of fuel, the air in the tank becomes saturated vapour. When the tank is refilled, this vapour will escape (unless you have a vapour recovery system in place) and with it, a certain amount of your fuel.

Malicious fuel loss:

Short delivery: When a petrol tanker leaves its origin, it could have been recorded as carrying 10,000 litres of fuel. But by the time it reaches you, there is only 9,000 litres. This is a common occurrence and can be attributed to temperature loss. However, it can also be due to an unscheduled stop where the driver is being paid to fraudulently unload fuel to another person or site. It is also not uncommon for the road tanker capacity to be relabelled to account for the fuel reduction.

Adulterated delivery: While a short delivery will see you being delivered less fuel, an adulterated delivery will deliver the right amount of fuel but of lower quality. On the way to you, the delivery has stopped, unloaded some of the fuel, and replaced it with lower quality and lower cost product.

As you can see, not all fuel differences are malicious, but if you aren’t taking a thorough approach to fuel inventory management, it can be hard to tell if you’re receiving what you’ve paid for.

Protect yourself from the theft threat

While the level of malicious fraud is low, it’s not something to ignore. Learning from the mistakes of others is less costly than learning from your own – and fraud is a good lesson about the importance of monitoring your fuel.

So, how do you determine the difference between the amount of fuel you’re paying for, and the amount you’re receiving?

The only way to ensure you’re receiving the right quantity and quality of stock – and protecting yourself against potential fuel fraud – is by reconciling your fuel every day. This includes:

    • Measuring your fuel levels
    • Comparing it to sales and incoming deliveries
  • Identifying and understanding where your fuel variance has occurred

After reconciling your fuel, if you find yourself with unacceptable fuel variance  – is it possible there is something more sinister going on, be it fraud or tank leaks?

Knock out fraud with automated fuel inventory management

You know what they say – the best offence is a good defence. So, when it comes to reconciling your fuel and defending yourself from fuel loss and fraud, the best defensive play you can have is to get on top of your fuel management with an automated fuel monitoring system.

By engaging an automated fuel monitoring system, the monitoring, analysis and alerts are taken care of for you.

The right fuel monitoring system can provide:

    • A full overview of every tank, fuel dispenser, sale and delivery, so you know exactly what’s coming in and going out
    • Live data updates from multiple points across your petrol station, so you’ll know the minute something isn’t right
    • Automatic fuel reconciliation, which will give you instant insight into suspicious fuel loss
  • Alerts and alarms as soon as you experience significant fuel loss

Full visibility means full awareness

Properly monitoring your fuel loss by engaging effective fuel inventory management can be the difference between running a successful operation or not.

Fuelsuite is a comprehensive fuel monitoring solution that puts the magnifying glass on fuel reconciliation. By digitally transforming your station, you will win the fight against fraud every time.

Having access to accurate, live data will pinpoint fuel loss and give you full visibility over your investment.

Instantly view:

    • The amount of fuel coming in and going out of your tanks for accurate reconciliation
    • Fuel temperatures to identify local fuel behaviour
  • Leak detection – because a leak can cost you even more than fraud

Fuelsuite will report on the entire cycle of your fuel – from ensuring you’ve received what you’ve paid for, to making sure it is stored and dispensed safely and accurately.

Whether you think you’re susceptible to fuel fraud or not, accurately reconciling and monitoring your fuel is a non-negotiable. To speak to EMS about your fuel inventory management or about our leading fuel management system Fuelsuite, get in touch.

To find out more about how Fuelsuite can give you better visibility and control over your fuel delivery, download your free ebook.