2022 Fuel management

Fuel retail is a challenging business. Margins on gas and diesel are razor-thin, and business tends to work on volume sales. Customers are buying less fuel than they used to, thanks to pandemic travel reduction, higher cost of a fill and alternative energy vehicles. Indices such as these show good fuel management practice is now more essential than ever.

At Canada’s retail fuel sites, every 5 litres of fuel lost to theft, evaporation, leaks and calibration errors means an operator must sell an additional 85 litres of fuel to recoup the profit. Better to spend money on systems that deliver a firm grip on tank inputs and outflow than use ‘guestimates’ to determine what is in the tank.

There are four key areas impacting fuel management, suggests Matt Tormollen, vice-president & general manager, Global Solutions at Dover Fueling Solutions. He sees theft, fuel delivery accuracy, the need for real-time inventory inputs, and environmental compliance as leading areas where operators face challenges.  

“Thieves are becoming more clever and sophisticated in their efforts to hack into fuelling dispensers and the underground tanks. Thieves are stealing thousands of dollars worth of fuel per occurrence in broad daylight then reselling it on the black market,” says Tormollen, mentioning that loss prevention must be paired with tools to ensure delivery accuracy.

“An 8,500-gallon delivery with an error of just 0.5% can equal $170.00 worth of loss in fuel inventory.” 

Important as well is the need to have inventory determined in real-time rather than rely on projections. “Often fuel deliveries need to be scheduled days in advance of the deliveries due to a nationwide shortage of fuel delivery truck drivers," he says. "Last-minute changes with delivery times require quick and accurate processing of information of existing fuel inventories in the event a change needs to be made with the order or delivery time.”

Confusion in inventory can occur due to meter drift, an equipment challenge where wear and tear may cause meters to perform inaccurately between calibrations. According to Gilbarco Veeder Root, the growing number of contaminants from today’s cleaner fuels, recalibration and maintenance are needed more frequently, compromising the accuracy of fuel meters.

Also impacting inventory accuracy is loss caused by evaporation due to temperature. Gilbarco Veeder-Root points out that this can occur in delivery trucks and underground storage tanks. For example, cold outside temperatures can cause the fuel to contract in the truck before delivery occurs. This contraction causes a variance between the actual delivery and the bill of lading. When the outside temperature is warmer than the temperature below ground, a fuel delivery may contract inside tanks and result in an apparent loss without any delivery discrepancy.

Storage tank leaks stand out as a leading cause of fuel level discrepancy. A leak delivers a direct hit to the profitability of the site and creates a massive chain of environmental events that can mean huge costs. 

Do your paperwork for environmental compliance, advises Tormollen. “Fuelling station operators face egregious daily fines for locations that are legally out of compliance for not having paperwork completed promptly. Typically, fines are based on the number of days that a location had incomplete daily reports.”

Solutions

Fuel management solutions include automatic tank gauges to alarm management services. 

The Veeder-Root TLS4 series Automatic Tank Gauges (ATGs) provide comprehensive wetstock fuel site data for advanced fuel management. The system offers multiple reconciliation features to track fuel inventory as it enters or exits in underground tanks, regardless of delivery or dispensing activity. The unit continually tests the tank for leaks with data collected during each idle period for a highly accurate leak detection database. Tanks are also continuously monitored for theft that may happen during quiet periods. The TLS4 is capable of complete remote access allowing managers to view inventory in real-time from anywhere there is WiFi.

At Dover Fueling Solutions, they offer ClearView Wetstock Monitoring Services. These monitoring systems rapidly identify and resolve instances of fuel loss to help fuel businesses remain as profitable as possible. The end-to-end fuel management solution collects and processes real-time data so that operators can quickly reconcile any fuel discrepancies down to the gallon or litre.

Tanknology offers robotic testing technology for fuel storage tanks that complements conventional out-of-service inspections. This robotic tool is ideal where it is not practical to drain and put the tank out of service for inspection, or if operators anticipate that no repairs are required. According to Tanknology, the Robotic service systematically scans the tank floor to collect and record a high volume of UT data for analysis by a qualified inspector. 

Trends

“The fuel management sector is heading towards complete automation and the integration of sophisticated analytics and telemetries,” says Tormollen.  “Advanced technology today can routinely and remotely control a variety of key systems from fuelling dispensers. This technology reduces the number of times a service technician needs to make an onsite visit, to a completely customizable double-meat, double-cheese sandwich with jalapenos on a sourdough bun.

“Another one of the latest trends is in c-stores. Companies are constructing bigger stores with larger fuel islands to accommodate as many as 100 vehicles at once. This size demands a much larger real-estate footprint, but something to keep in mind is that larger fuel storage tanks require more attention to environmental compliance. Home office logistics need to have the capability to accommodate more frequent fuel deliveries that can often be as many as four to six tanker deliveries a day. This accommodation requires more planning to make certain that delivery trucks aren’t waiting for extended periods and that their loads will fit in the tank. All of this will be done with a handful of people in the home office using complex automated systems. Many fuel retailers have passed the threshold of operating a multi-billion dollar per year fuel business and, as a result, need to have access to superior technology. Even though many fuel operators are doing billions of dollars of business, margins can remain slim. Automation is the key to efficiency, and efficiency is the key to profitability.”

Originally published in the May/June 2022 issue of OCTANE.