We answer the most frequently asked questions about fuel marking to help you better comprehend the way it works, the issues it solves, and the benefits it brings.
1. What is fuel marking?
Fuel marking is a method of authentication used to combat theft, smuggling or adulteration of petroleum products. Governments can ensure that their national fuel supply comes from legal sources and comply with local or international standards through our Fuel Integrity Programmes.
It is today the most advanced way to protect fuel supplies against fraudulent behaviors; for that reason, it’s used by many governments and oil companies around the world.
2. How does fuel marking work?
The first step is to “chemically stamp” the fuel with a unique marker. The fuel can then be transported from the fuel terminal to the retail stations, where it is later verified to ensure that the fuel sold nationwide comes from legal sources or to reveal any sign of dilution.
Our teams are in charge of conducted field inspections throughout the country to confirm the presence of the marker. To do so, we first extract two samples from the tank and then test the first one. Thanks to our advanced technology, it only takes a few minutes to obtain the results. If no marker is detected after the test or if the concentration is low (a sign of adulteration), we seal the second sample and send it to a forensic lab for further investigation.
This process helps Government quickly identify illicit supplies of fuel and apply corrective measures.
3. Why use fuel marking to tackle fuel fraud?
Every year, it is estimated that US$133 billion of fuels are illegally stolen, adulterated, or defrauded from legitimate petroleum companies.
Fuel marking has been proven to be the safest and fastest way to combat fraud with no impact on the fuel quality and a considerable positive impact on revenue collection. By using fuel marking, many countries have put a curb on illegal smuggling of petroleum products.
To better understand the impact of fuel fraud, read our article on the top 3 consequences of fuel fraud explained.
4. It is safe?
Fuel marking is completely safe, markers used by Cotecna through its Fuel Integrity Programmes are undetectable and have no abrasive effect on the fuel.
Our markers are also environmentally friendly in respect to the Stockholm Convention on persistent organic pollutants and the Montreal Protocol on substances that deplete the ozone layer. They also offer a complete tracing of quantities distributed throughout the supply and distribution chain, resulting in a considerable improvement of the quality of petroleum products over time.
5. How fuel fraud happens?
Fraud can be classified into 3 main categories:
- Dilution of taxed fuels with other tax-free or low tax products such as fuel smuggled from a neighboring country where fuel is cheaper or by adding a low-cost solvent
- Subsidized fuels diverted from their original purpose
In both cases for traffickers, the goal is to maximize profit margins regardless of the consequences.
- Sale of an X-branded product in a Y-branded retail station. This happens in countries where retail stations exclusively sale one branded fuel (e.g., Total, Shell, Esso). When they sell from different distributors (lower price), they mislead the consumer, negatively impacting the oil company's brand image.
Read our article on fuel theft explained: Four ways fuel is illicitly traded to have an in-depth understanding of fuel fraud.
6. What are the benefits of fuel marking?
There are many benefits associated with the use of fuel marking for the government, oil companies, the environment, and consumers. Setting up a Fuel Integrity Programme enables to:
- Strengthen consumers’ trust in government and oil companies;
- Contribute to environment protection by reducing unregulated polluting elements;
- Bring immediate and measurable positive effect on tax collection and sales volume;
- Provide effective solution to fight against subsidy abuse;
- Weaken fraudulent behaviours and criminal combat activities;
- Protect consumers from early obsolescence of vehicles due to poor fuel quality.
7. Why choose Cotecna Fuel Integrity Programmes to secure your fuel supply?
We work closely with our clients to ensure the highest quality of service. To do so, we rely on our 4-pillar value proposition:
- Security: We apply a robust process control to maintain a high level of security and safety from markers storage to market surveillance for all staff and equipment.
- Compliance: We guarantee the highest standards by regularly and randomly performing audits that reinforce our quality approach and our commitment to transparency
- Traceability: We monitor the usage of markers and all our processes and results using our platform to predict the risk of fraud or collusion.
- Efficiency: We put in place a set of standard operating procedures, including automated actions, to increase overall productivity and ensure the success of all stakeholders.
Additionally, our programmes finance themselves in less than two years, and they also allow to increase revenues for governments and oil companies by 30% on average.