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You are here: Thought Leadership Articles By AIA Automation in Petroleum Retailing

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Automation in Petroleum Retailing Print Email
Written by AIA   

The business landscape of the energy sector, especially petroleum, is becoming increasingly uncertain and unpredictable. What makes this sector much more challenging is that many of the factors that directly affect profitable operations are beyond the direct control of the organizations. Protecting the Consumer against unscrupulous retailers has always been a challenge. The role of technology in petroleum retailing needs to be explored in a way that encompasses the interests of multiple stakeholders — viz. supplier, retailer and consumer.

Role of Technology in Petroleum Retailing
The Gas Station is the final 'point of sale' in the petroleum supply chain. This is the touch point with the end consumer and hence becomes the most important functional point in the entire Supply Chain.

Petro-retailing markets are evolving rapidly world wide. These markets are also becoming commercially competitive, as price controls are lifted. In many countries, the role of the government in the petroleum sector is being redefined and markets are being deregulated, i.e. state interventions such as special treatment of state-owned oil companies, price controls and restrictions to trade and are being removed. As a result the petroleum sector is becoming more and more competitive.

In a market where price is regulated and therefore almost uniform, factors such as convenience and product / service differentiation play a more important role in winning the market share. When price becomes free to move, it assumes greater importance in winning customers. As prices begin to vary for the same product, customers differentiate outlets not only by the quality of the offering and the convenience of acquiring it, but also by the price being charged. In markets such as fuel retailing that sells homogenous products, the importance of price increases considerably, as consumers are not able to differentiate between the product attributes. Therefore, within this type of market in order to successfully retain market share whilst maximizing profit, the issue of pricing is crucial and needs to be addressed.

Petro Retailers in any geography face the following key challenges with underlying objectives:

  • Retain / increase market share
  • Optimize profitability at point of sale by reducing operation cost throughout the supply chain
  • Optimize gas station network
  • Manage and reinforce customer perceptions for right quality and quantity
  • Improve customer experience at the forecourt. Establish supplementary revenue stream using the same infrastructure.
  • Retain and gain ‘loyal customers’ through brand building and promotional campaigns

To face these challenges, retail management needs to look at  :

  • Transaction data, sales volumes, market prices, pricing rules, asset utilization patterns
  • Usage patterns, demographic characteristics with respect to customer and retail network
  • Efficient and automated retail operations
  • Visual evidence of right quality and quantity of the product delivered
  • Remote operations monitoring
  • Multiple retail propositions at point of sale
  • Loyalty programs based on consumption pattern and offering various payment and filling options at isle

Complex and diverse networks of Gas Stations are often managed and controlled using Gas Station Management System, typically located at the area offices of petrol retailers. This solution enables remote monitoring of retail operations, price management, product promotions, end of day data warehousing and enhanced reporting through slicing and dicing the data warehouse.


Gas Station Automation System

  • Gas Station Automation System provides monitoring, control and management of Gas Station with following major components:
  • Forecourt Controller: To monitor and control forecourt activities
  • Outdoor Payment Terminals: To provide various payment methods, enable dry stock sale on fueling isle, provide fuelling receipt, enable attendant tagging, forecourt shift management, etc.
  • Tank Level Gauges: To provide measurement of product and water level, temperature and volume re-conciliation
  • Back Office System: To provide management and configuration of gas station having modules for:
    • MMI Display
    • Shift Management
    • Wet Stock Management
    • Dry Stock Management
    • Financial Accounting
    • User Management
    • Reports
    • Gas Station Configuration
    • Fleet Management

Fleet Management System
Fleet Management System provides a unique way to handle Fleets at Gas Station:

VIU (Vehicle Information Unit) fitted in each fleet vehicle is hooked up to the Odometer and with fuel cap. Once connected and initialized, the VIU will keep correct log of the miles traveled and also details on the fuel type required for vehicle, registration number, etc. Whenever a fleet vehicle reaches gas station for re-fuelling; the automation system will communicate with the VIU to upload odometer reading, type of fuel permissible, etc and will grant automated authorization. Authorization will be granted in line with limits and restrictions provided for each vehicle. During re-fuelling operation, the dispensing goes on till the time nozzle is inserted in the fuel tank and communication between VIU antenna and nozzle is established, which ensure that 100% of the fuel dispensed is filled up in the vehicle authorized by the system.

Further, since the odometer reading of each vehicle is uploaded during the re-fuelling operation, fuel consumption pattern of each group of vehicles with respect to time and distance can be calculated and provided to fleet owner as report.




Fuel Delivery Management System @ Terminal
Fuel Delivery Management System manages the demand fulfillment side of the Petroleum Supply Chain. It ensures secure delivery of petroleum products from Terminal to Gas Station and as per the replenishment schedule worked out by the Secondary Distribution Planning and Scheduling System located at the Area Office.

Fuel Delivery Management System has following major components:

  • Electronic Lock, operated by Electronic Key
  • Electronic Lock and Key Programming Station
  • Fuel Delivery Management Software
  • Electronic Lock Reader at Gas Station


Control Room based Management

Integrating the various elements of data that is being collected from the field on a 24*7 basis, can be a very onerous task. Sorting and viewing that data to ensure that all business parameters are being met, is now possible in the comfort of a 21st century control room. Supervisors and analysts manage the entire retail operations using a central, vivid display system.

At the Marketing head office level, usually technology enablers like Dynamic Pricing, Secondary Distribution Planning and Scheduling and Demand Forecasting are deployed to enable quick decisions related to pricing, forecasting and replenishment across the secondary supply chain.

At the corporate level, strategic solutions like Network Planning are deployed to enable decision related to network optimization to boost the marketing gains.


— Manju Nandwani