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‘Smart’ fuel management  in COVID-19 times and beyond

‘Smart’ fuel management in COVID-19 times and beyond

Article first published in PetrolPlaza, May 19, 2020

As the global economy continues to navigate COVID-19, the pandemic is dominating the fuel retail industry agenda, severely impacting fuel demand and heavily influencing retailers’ operational, safety and fuel management practices.

Changes in fuel consumption have mirrored various stages of lockdown measures. Fuel sales data analysed from our wetstock analytics platform reveals fuel volumes dropped 40% in mid-March for regions where social distancing and restrictions on non-essential activities were first introduced, remaining stable at low levels. Other regions, where a State of Emergency was declared, saw fuel volumes drop 90% in mid-March, also remaining stable at significantly low levels. More recent data for most markets in May suggests the demand destruction is starting to ease, with volume trends likely to modestly improve as restrictions are lifted.

The pandemic has also thrown up operational and environmental challenges including delays or inability to get critical resources on site for maintenance checks, unresolved fuel losses and higher risks of prolonged fuel leaks due to reduced staffing.

COVID-19 has served to magnify the limitations of traditional fuel management and maintenance practices. Rather, fuel retailers embracing wetstock analytics platforms can run their fueling operations remotely, efficiently, and as cost effectively as possible.

Fuel analytics platforms featuring live data with ‘smart’ alarms enables retailers to buy efficiently, minimise losses and maximise their margins. The prevailing fact is it takes 20 litres of margin to replace 1 litre of fuel lost at cost. Now more than ever, minimising losses from the depot to dispenser has a big impact on a retailer’s bottom line.

The latest wetstock SaaS analytics builds on top of existing infrastructure retailers invest in for everyday operations. Instead of installing extra boxes at site, utilising existing POS systems and tank gauging data incorporated into centralized intelligence software gives retailers the answers the industry has long chased: real, tangible fuel loss detected by root cause analysis for quick and efficient action on site.

Technology has allowed the industry to move away from alarms around general conditions to investigate any of 10 possible causes to pinpoint specific reasons for loss, resolving the issue and verifying that the losses have stopped.

As the industry marches towards forecourt automation, a key challenge is interpreting huge volumes of data. Sales transactions, tank gauge stock readings, ATG alarms; it can be overwhelming and often leads to more waste than efficiency chasing each potential issue.

‘Smart’ alarming built into fuel analytics solutions allows retailers to focus on high value, preventable fuel loss from delivery shortages, tank chart errors, releases to ground and meter drift. Reducing waste means reducing loss without over investing in chasing false fail results, false equipment alarms and meaningless fuel variances.

Other key advantages include:

  • When terminal gate prices change, accessing live stock levels to capitalise on shifting prices increases margins.
  • When maintenance services are delayed, smart exception-based alarms ensure sites with the highest fuel losses are attended to first, with root cause analysis detecting the cause of the issue before stepping foot onsite.

For example, using wetstock monitoring and alarm management software, a fuel retailer recently identified product contamination and high fuel loss from a tank system with two fuel grades, mitigating risk by directing the site to place the tank on ‘stop fill’ and cease trading and deliveries until a maintenance contractor – delayed due to COVID-19 – could get onsite site to resolve.

Additionally, a retailer in a jurisdiction with strict compliance policies could remotely determine the exact cause of a fuel variance, enabling them to document the exact date/time of the variance, contact the site and confirm there was, in fact, an inspector onsite testing the pumps. The inspector used 90 litres of fuel in test mode, so no sales were recorded, returning the product to the tank creating a gain. The site closed the compliance period without an expensive technician visit.

Fuel retailers can also be directed to real issues like a probe offset where sludge on the tank floor prevents the probe from sitting flush on the tank bottom after service, resulting in a probe offset variance. The probe sits two inches higher, corrupting the ATG’s tank chart conversions resulting in variances and allowing up to two inches of water to collect on the tank floor before alarming.

Living and working with COVID-19 is with us for some time. Exactly when and what the industry recovery looks like is widely debated. But one thing is for sure: retailers that can pivot and make informed decisions on their fueling operations based on real-time data and insights will come out stronger the other side.

27.05.2020 – by Leighton O'Brien
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