Fuel operators fully-realize the costs of maintaining fuel inventories at their retail locations. At $3+ cost per gallon, an average retail c-store can have over $50,000 of inventory on-hand at any time. At a travel center, this inventory can exceed $200,000 or more!
Much mystery still surrounds what happens to fuel products as they are received from the terminal, dropped into the underground tanks by the hauler, rests underground in the tanks and lines, and how accurately the fuel is being dispensed.
Many operators may still rely on tank gauge testing and statistical inventory and delivery accounting to track their fuel purchases, sales, and underground inventories. Traditionally, this has been a fine practice, but may not give you the immediate notice that you need when shortages, theft, leaks, or losses occur. Oftentimes, it can be as long as 30 days before large variances or shortages are detected. But, if an operator is below the 1%+130 gallon variance allowed by most states, then that may be considered good enough.
Fortunately, growing technology does exist to better-automate inventory reconciliation and add addition depth and metrics to the equation. As companies grow and advance into the future, investment in data analytics and increased technology can pay off handsomely.
For example, with automated continuous inventory reconciliation, you can obtain the most accurate and complete picture of your fuel operation — from every underground tank and fuel line, and dispenser, into your customers’ fuel tanks. A robust system can feature real-time, continuous reconciliation technology and is also ideal for high volume sites equipped with automatic tank gauging systems (ATG) and advanced dispenser pump controllers. However, no matter the volume or size of a site, a serious issue can still cost the operator thousands of dollars.
How it works
With the completion of every fueling transaction, a simultaneous observation of elapsed sales and associated tank system product heights and temperatures are recorded. Continuous reconciliation identifies operational problems as they occur with pinpoint accuracy. Some advanced forms of continual reconciliation are certified to provide the EPA leak detection monitoring for complex manifold tank systems, often up to 100,000 gallons in capacity. Moving to continuous reconciliation not only gives the operator improved leak detection, it can also speed the notification of potential leaks, losses, meter drift, and theft compared to weekly or 30-day inventory reconciliation.
Most forms of continuous reconciliation technology features:
*Precision ATG Tank Charting – A must for accurate inventory calculations. Many operators depend on the charting from the ATG, which may be inaccurate or change over time. Tilt and groundwater changes can affect the geometry of underground storage tanks dramatically. With more-advanced services, the provider will rechart your tanks based on the precise movement between the tanks and dispensers in order to increase the accuracy of fuel variances, leak and loss detection. The provider can also make suggestions to the operator so they can update their tank charts, or even handle the change to the ATG for them.
*Inventory Variance Reporting (1%+130, MD, CT, NY) to meet state and federal regulations is also a benefit of many of these advanced analytical services. As a result, operators can better know where their tanks stand on variances, even on a daily basis. Often, these services can fully-automate paperwork and fuel delivery auditing requirements. With this method of electronic monitoring, operators can no longer count on basic ATG inventory and delivery readings for your loss analysis alone.
- Meter Drift Analysis– This is an available method of identifying meters drifting away from strike and holding back or giving away product. Meter drift analysis reports can often be provided for each dispenser position associated with a product to help you identify the financial impact that meter error is having on site profitability.
- Dispenser Flow Rate Analysis– This advanced procedure calculates the dispenser flow rates for each position associated with each fuel product. The purpose of dispenser flow rate analysis is to identify dispenser positions which are delivering products slowly to the customer due to clogged filters, defective flow arrestors, or inadequate turbine pump capacity.
- Delivery Audit– Delivery auditing can identify the gross and net amounts of product that has been delivered to the tank system. This is critical information, because deliveries to retail facilities are not metered when product is introduced to the tank system. Electronic delivery auditing provides a reliable measure of the actual amount of product delivered versus the bills of lading (BOL) that you receive.
Such delivery calculations can also take factors such as temperature, tank geometry, and the quantity of elapsed sales during the delivery all into consideration in the provider’s findings, as these can all affect accuracy.
- Blend Ratio Verification– Product blending has become increasingly common as retail operators make every effort to optimize the use of existing tankage, reduce the costs of tank replenishment, and handle multiple grades and types of fuel.
Petroleum retailers have turned to product blending to create mid-grade gasoline and free up existing tankage for other products. Typically, dispenser blend ratios for gasoline are set to meet octane requirements. When the ratios at particular dispenser positions differ from the settings needed to meet octane standards, some solution providers can pinpoint these occurrences by dispenser position and actual blending percentage.
Travel Center operators typically blend Biodiesel with conventional Diesel at each fueling facility. Biodiesel blending may consist of a transfer of Bio-Diesel into conventional diesel tanks during a delivery. Alternatively, Biodiesel can be injected into a trunk line while fuel dispensing is in progress. Robust inventory reconciliation solution providers can monitor these blending operations accurately to ensure proper blend ratios are upheld and to maintain an audit of transfers for Biodiesel tax credit and state fuel tax purposes.
- Fuel Theft at the Dispenser– If a dispenser has been tampered with so that it will not record actual amounts of product withdrawn from the tank system, an advanced use of monitoring technology identifies and alerts you to these incidents by date, time, and amount.
- Repair Validation– During a dispenser or automatic tank gauge repair at a facility, solution provider support desks can assess whether the repairs were effective or if additional work is needed. This ability to verify that a repair has been made and inform you that performance has been restored — in real-time, eliminates repair call-backs, increases efficiency, and saves you money.
In summary, the use of electronic and continuous inventory reconciliation can identify many issues related to forecourt performance, allowing operators to correct well before the costs grow. As you look for ways to improve your operation, an investment in increased forecourt monitoring technology and robust inventory reconciliation can pay off handsomely in cost savings as well as add automation and staff efficiency to the equation.