New solution by Pesapal to solve fuel theft at pump stations

By Steve UMIDHA

A new solution by online payment platform Pesapal could see petroleum retailers and petrol station owners suppress one of their most pressing financial drainers in the booming business.

Unofficial estimates in the fuel retail market show that such losses can suck up to 40 percent of finances relating to ordinary accounting slipups in fuel and lubricant materials.

Cases of shrewd behaviors like illegal bunkering and fuel contamination have become common complaints among individuals in the fuel supply chain business since most petrol stations are not ‘fully’ automated and often need some processes to be handled manually.

Those familiar with the challenges in the sub sector – especially in the oil and gas downstream operations, which are typically processes that occur after the production phase to the point of sale, have seen witty employees take advantage of the existing loopholes and are fleecing their employers, dry.

It is a systematic internal theft that an IT expert Renee Iyanga concedes has gone undetected for eons.

“As it is now, the traditional way of most operations at forecourt is very manual, and that means that there are so many leakages in terms of revenues and stock pilferages that proprietors suffer,” offers Iyanga from online payment platform Pesapal – one of the first pioneer brands in the East African region snapping up opportunities in the forecourt fuel retail space with solutions to mitigate such losses.

Many pump owners, after years of tallying losses, are now awake, according to Iyanga. Keen to avoid mass financial leakages at their forecourt businesses, a growing number of proprietors are now installing innovative softwares able to detect and relay information in real time of all logistical operations in retail fuel business to the last point of sale or delivery.

Systems such as Pesapal Forecourt Management Solution (PFMS) – a comprehensive system designed to help fuel retailers optimize their operations can monitor all transactional processes of a given petrol station and transmit real-time updates and tinkering alerts.

“At a given point, a typical petrol station has up to 8 revenue streams in a single day that needs constant monitoring by one person.

So, this local solution offers features such as remote monitoring, real-time reporting, inventory management, point of sale integration and automated processes and are offered in one platform to a petrol owner,” says Iyanga.

The solution allows petrol station owners to automate fuel and retail management processes and is currently operational in Uganda, Kenya and Tanzania, offering integrated payments alongside monitoring and data tools.

A forecourt controller includes an internal database for pump sales, tank measurements, in-tank deliveries, alerts, GPS records and fuel attendants’ and customers’ tags.

Ideally, it generates reports using a web browser and also can automatically upload all the registered records to any remote cloud server, allowing to easily remotely receive all detailed reports from the petrol stations, petroleum depots and fuel delivery trucks.

It is a concept which according to a 2020 report by KPMG has successfully worked in c-stores like groceries and other products, liquid boost like cafes and is expected to grow across other sectors.

But because most fuel pumps lack such solutions, petrol stations continue to suffer unquantified revenue leakages and losses, most of which are internally engineered.

Revenue leakage are monies or finances that have been earned but not collected, generally because of a lack of awareness on the part of the business.

It usually results from manual — and often faulty — finance and accounting processes, such as pricing errors, the use of incompatible invoicing systems, relying on spreadsheets and unbilled or underbilled services.

Some types of revenue leakage, according to Iyanga, are industry-specific, while others tend to happen across industries and connect distribution points and digital payments with tools to reduce costs and wastage, improving customer experience.

“Independent petrol station operators and large forecourt networks are changing up their business models, with convenience services, new fuels and battery charging,” says Pesapal Chief executive Agosta Liko, saying the design – a local product, is helping them automate and digitize.

The numbers:

-Forecourts’ product and service offerings are continuously evolving, driven by customer demand for convenience — contribution of fuel retailing will continue to decline while non-fuel retail offerings will gain prominence – KPMG.

-Global forecourt retail market stood at US$196.6 billion in 2019 and is expected to grow at a CAGR of 3.6 percent during 2019–23, to reach US$226.4 billion by 2023.