insights

Russell Dupuy 05 Dec 2018 By Russell Dupuy

Has your fuel been stolen, or just lost? Understanding your losses with a fuel management system

Fraud can happen anywhere – online, in big companies, and even in petrol stations. Retail petroleum fraud occurs when fuel is stolen directly from the station dispensing it, generally in the form of undercharging or overcharging customers. It is widespread in some parts of the world, and at times it can be incredibly hard to spot.

From cooking the books to using faulty fuel dispensers, fuel theft is carried out in many different ways – and it’s one of the critical factors that could be affecting your bulk stock variance. If not effectively monitored, it can wreak havoc on your business’s profitability and compliance.

But it’s not the only factor you need to look out for.

Bulk stock variance can affect any site, regardless of where you operate or whether you are exposed to fraud or not. If you’re experiencing a variance in stock, you need to be able to either identify fraud or rule it out – and determine exactly what’s causing your variance.

Stock variance is caused by a number of different reasons, and they all have varying consequences.

If you don’t know what’s causing your variance, you could face major repercussions.

To keep your operation safe and compliant, you need to understand what’s causing your stock variance.

What’s really going on at your fuel site?

Retail petroleum fraud can be carried out in multiple different ways, including:

  • Purposely adulterating data
  • Interfering with dispenser calibrations
  • Manipulating firmware to ensure a consistent percentage error

These are common ways to commit petroleum fraud within petrol stations.

If one or all of these practices are taking place at your station, it can be difficult to correctly determine your daily variance and establish if you are experiencing fuel loss.

Unfortunately, many operators assume the variation is due to ‘normal’ fuel loss. When there is no effective fuel management system in place, this is easier to assume than collating and reviewing fuel data which can be sparse and inconsistent.

But in making this assumption, you make it easier for a fraud operation to continue.

Unless you have complete visibility over your fuel management, you won’t know if you’re experiencing unexplained fuel loss and could be at risk of petroleum fraud – or something else.

So, what else could be the reason for a stock variance?

Often, the answer is tank leaks or saturated vapour loss – two incidences that can have major consequences for the environment, and in turn, for you. These include:

  • Up to $1m in EPA fines and extensive clean-up costs
  • Temporary site closure, leading to loss of profit and customers
  • Contribution to air pollution and greenhouse gases
  • Contamination of soil, groundwater and local environments

Without a proper fuel management system in place that can provide you with the cause, location and size of your variance, knowing if you have fuel loss and establishing the source will be difficult to determine. Not knowing if a loss is abnormal or not can lead you to ignoring a dangerous or costly situation.

The importance of effective fuel management

Effectively monitoring your fuel is key to running a successful site. Whether your priority is profit or compliance, neither of these can be successfully achieved without clear visibility of your stock and operations.

To achieve this, you need an automated fuel management system that will quickly identify the location of the variance and resolve it immediately.

Effectively uncovering fraudulent operations (or any other major fuel loss) relies on your ability to:

  • Correctly calculate your daily variance in stock
  • Establish whether this variance is normal or abnormal
  • Determine where the abnormal loss is coming from, and what is causing it

This can all be achieved by engaging a comprehensive fuel management system.

Fuel system automation allows for high-definition, high-frequency data that shows exactly where and how you’re losing your fuel. A fuel management system that offers comprehensive fuel reconciliation will allow you to identify any fuel losses and gains in real time – compared to day, week or months end when monitored manually – which allows you to pick up problems and patterns more quickly.

Give yourself peace of mind

Retail petroleum fraud is a big issue for many site operators throughout the world. But simply determining whether it is or isn’t a problem for you isn’t the end of it. If you aren’t properly monitoring your bulk stock variance, fraud is only one of the problems you face.

Ensuring you have an effective and efficient fuel management system in place can take the work out of monitoring stock variance by utilising automation technology.

Fuelsuite is an all-in-one fuel management system that brings together EPA compliance, fuel inventory, delivery and reconciliation. It gives you the tools to effectively manage your stock levels and fuel consumption, so if you’re experiencing stock variance you will instantly be able to determine whether your losses are:

  • Normal or abnormal
  • Caused by a tank leak
  • Due to technical fault
  • Following a continuous pattern

This information allows you to quickly and effectively rectify the issue, saving time, money and reputation, allowing you to continue to run a reliable and profitable operation.

Regardless of your individual priorities and risks, understanding your stock variance is vital. EMS are a leading provider of wetstock management, achieving improved fuel monitoring solutions through industry-leading technology and advice.

To speak to us about our leading fuel management system Fuelsuite, get in touch.

To find out how Fuelsuite can give you complete visibility over your wetstock from anywhere in the world, download your free eBook now.