Diesel fuel theft has increased over the past decade in direct correlation with the price of oil. Rising energy demand in emerging markets such as India, China, Russia, and Brazil and volatile supply chain disruptions due to disasters and civic unrest in oil-producing nations will continue to drive fuel prices higher, creating a market lucrative for black market fuel. This has led, since the financial crisis of 2008, to a situation in which diesel theft is becoming a very important factor in the risk management of a logistics company.
The current turmoil in Libya is a good example of how volatile fuel prices are. In December 2010, before the civil war, the country produced an average of 1.6 million barrels per day. During February, when the revolt gathered steam, production fell to almost the baseline of 400,000 barrels per day and Gaddafi was unable to export legally. According to The Economist, this only reduced global oil production by just 1%, while the price of oil inflated sharply by 15% to $120 per barrel. While interesting in its own right, this price study suggests that oil demand will continue to increase, while production volatility causes oil prices to rise erratically. When these prices increase, fuel, gasoline, oil and diesel have started to attract the attention of criminal agencies and enterprising scammers.
TruckPol, a UK-wide cargo crime intelligence agency, further illustrates the correlation between diesel prices and diesel theft. They have started publishing a report every quarter that shows fuel theft statistics reported by carriers. His analysis of crime data certainly indicates that diesel theft has increased. From just the period of January 2011 to March 2011, the incidence of fuel theft increased 18 percent. This trend can be correlated with the general rise in UK diesel prices. According to the Freight Transport Association, the cost of diesel across the UK rose from 105.11 pence per liter (6 January 2011) to 112.7 pence (23 March 2011), an increase of more than 7 percent.
These stats only illustrate invasive fuel siphon theft, the true stat would be much higher since diesel theft often occurs as a scam in which employees “skim off the excess” with increasingly ingenious methods. An interesting method reported by The Times of India illustrates a scam in which workers loosened nuts on fuel valves connected to tanks during the journey of passenger and freight trains and allowed fuel to slowly seep into bottles. of plastic. Or on a much more egregious level, an outdated ‘pencil and paper’ accounting system is abused by US military contractors selling diesel on the black market, costing the effort in Afghanistan hundreds of millions of dollars.
What can companies and governments do to stop the flow of fraud and theft of their vehicles and tanks?
The first step is to insure the vehicle. Fit lockable gas caps and anti-siphon safety devices to guard against less motivated thieves armed only with a siphon.
The second step is to park in safe areas. This is the most important to protect against invasive fuel theft. Thieves are much less likely to be at risk of being caught when the vehicle is surrounded by adequate lighting and security.
The third step is to train your employees. They should know where a safe place to park is and how to react when a break-in occurs. The most important thing against fuel fraud is to treat your employees with respect, pay them well, allow them to be part of a team and incentivize them for good performance. A suitable list of fuel anti-theft techniques can be found on the Zurich insurance website, which deals with risk management for logistics companies.
While these methods are useful, they are far from complete. The most foolproof method of protecting your fleet is to actively monitor your diesel tanks through a telematics device. This works by integrating the operating values and location of your vehicles into a secure database to be monitored by a fleet manager. When you have control over your fuel tanks, you can prevent diesel theft when it happens by receiving an alarm message that your fuel level is getting low. Additionally, employee fraud is easily recognizable by recording a time and location stamp every time the fuel level goes up or down, objectively informing you of any occurrences or discrepancies in fuel levels.
