News Stream - Is Your Fuel At Risk?

News Stream - Is your fuel at risk?

This is the image we all hold in our heads: fuel theft in the remotest of the countryside links to the cartel, and the deliberate theft of huge volumes of fuel from rusty pipelines. The reality for most companies is very different, however – especially in the downstream oil and gas industry.

Downstream fuel manipulation: not my problem

Following our recent survey conducted in partnership with Authentix, we found that from a sample of downstream oil and gas professionals working across every continent, 80 percent felt their companies needed to improve the integrity of their supply chain - particularly with regards to fuel in transit. The reality for many of these companies is that haulers, terminals, and retail sites all struggle to account for issues with their fuel - with the vast majority unable to verify claims against them. Being referred from one person to the next, and having no consistent method of recording issues are just two such examples.

So, is this your problem? In short, yes. Only one in four of our respondents were confident that they had the required data to assure the integrity of their supply chain against issues of adulteration. Even more unbelievably, less than a third are using digital solution analysis, and only 16 percent are regularly testing for fuel markers. There is both a lack of data and a lack of serious commitment to testing and assuring fuel integrity in the downstream.

Opportunists and dilution

Not every incidence of fuel manipulation is the result of high-level organized crime. Often, particularly in countries in Western Europe and North America, there are just so many people in the supply chain (or supply web) who see an opportunity to make a quick buck - be it a hauler with the remnants of a load selling to a retailer who doesn’t ask too many questions, or a gas station owner facing a shortage of premium who dilutes his fuel to meet demand. From Edmonton, Alberta to Nakuru, Kenya - fuel adulteration, theft, and dilution is on the rise, to the tune of $133bn of fuels stolen or adulterated every year.

This year in Nigeria, a fuel scarcity led to a spike in the sales of adulterated product – a massive issue compounded by a lack of information and an escalating blame-game between distributors, government, and retailers. Valiant attempts to blacklist retailers known to be selling adulterated fuel are short-term fixes to a global issue - and fail to acknowledge the need for a proactive and agile approach to dealing with ever-changing methods of disruption.

Digital solutions

Downstream oil and gas is a consumer-facing business with an economic model based heavily on margins. The success of a downstream O&G business can be very easily affected by changes to oil prices and should be therefore protected from additional disruptions as a matter of highest priority.
Digital solutions, marking, and tracking are all methods of ensuring fuel gets to its destination in the condition in which it left the terminal. We are expecting the use of such technologies to increase in the coming years, and the number of companies using solutions such as those offered by firms like Authentix to grow exponentially.