Fleet Management

Can Fleet Fuel Fraud Happen to You?

April 2010, TruckingInfo.com - Feature

by Glen Sokolis, Sokolis Group

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In fleet fueling there are many ways your employees can steal fuel from you. Most companies truly believe, it can't happen to me.
Their theory is, "We have someone that spot checks that information sometimes. Our drivers make good money; they would never risk losing their jobs. Why would anyone want to steal from us? We take care of our employees." When it comes to fleet fuel, the fuel is liquid cash. Everyone would like to believe they know their employees well enough to think that person won't steal, but it happens.

According to an April 1 article by the Baltimore Sun, a former Baltimore public works employee admitted to stealing more than 100,000 gallons of diesel fuel from the city. The article reports that Maurice Boone, 45, was stealing the fuel for a year and half before a police officer caught him in the act Jan. 5, 2009. I can assure you that if they had a good fuel inventory control process in place, this would have been caught within two months.

Boone was reselling the fuel to an associate named James Wright for $1 a gallon, the Sun says. Wright is named as a co-defendant in the case. At this point in time diesel fuel was selling for over $4 a gallon at retail locations. I believe they were selling the fleet fuel for more like $2 a gallon.

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The publication reported that Boone was sentenced to eight years, with five years' probation, and a payment of $187,000 in restitution. The Sokolis Group has nothing against Boone, except you won't find us hiring him. What we are confused about is 100,000 gallons at even $2 a gallon is over $200,000. The average price per gallon this fleet fuel over this time period had to be close to $3.

The Sun points out that while a charging document says Boone 101,305.4 gallons, public works officials weren't exactly sure. In addition, the state's attorney's office believes Boone's actions may have cost the city as much as $1 million, but they don't have the paperwork to prove it. If public works officials don't know what the amount is like they say they don't, it is much higher than 101,305.4. They say the extent may have been close to $1 million so even at $3 a gallon for diesel fuel, like we said above, that would be a theft of at least 333,333 gallons. As a fuel management company, we would believe that number of 333,333 is more like the real number of fleet fuel stolen. As a fuel manager someone should have had some fuel inventory records to catch this amount of fleet fuel leaving the fuel tanks.

A department spokesman told the newspaper the high cost of diesel invoices went unnoticed because of the rise in fuel prices.

Sokolis Group agrees fleet fuel prices were rising but that has nothing to do with your fuel inventory and fuel management. Fuel inventory is just like any other inventory-- goods come in and goods go out. If you have 500 gallons of fleet fuel delivered, you need to know which vehicles the fuel is going to. If it only comes out to 450 gallons of fleet fuel and you don't have 50 gallons of fuel still left in the fuel tank, you have a problem. The fleet fuel pricing going higher is a matter of fuel auditing to make sure you paid the correct fuel price for what you bought. Since their job is just part of many jobs, most fuel managers at companies don't do a very good job at it because they don't have access to the proper data to be able to understand the fuel market trends.

The city should be ashamed of this. When there are fuel management companies out there that can manage all of your fleet fuel buying, fuel auditing, and fleet fuel pricing and checking for a whole lot less than $1 million dollars. For a couple of thousand dollars of month they could have been well serviced in fuel management by Sokolis Group or some other fleet fuel management company. Who knows who else is or was stealing fleet fuel from them? They don't track their fuel inventory, so it could be millions of gallons of diesel fuel that has been stolen. Maybe before Boone started to steal fleet fuel from them there was someone else that told Boone how to do it. Do you have someone stealing fleet fuel from you? Are you sure? Do you have solid fuel inventory records? How about the prices of fleet fuel? Are you paying what you should be or are your fuel prices higher than they should be? Do you know?

Glen Sokolis is president of Sokolis Group, a nationwide fuel management and fuel consulting company, www.FuelManagementSokolisGroup.com. You can reach him at gsokolis@sokolisgroup.com or (267) 482-6160.

Previous installments of "Friday Fuel:"
* "Successful Fuel Management Program Equals Discipline", 9-11-09
* "Who's Watching Your Fuel Program," 9-18-09
* "Fleet Fuel Margins: Are You Paying Too Much?" 9-25-09
* "How Do You Audit Your Fleet Fuel Invoices?" 10-2-09
* "Fleet Fuel Price Negotiating: Details, Details", 10-9-09
* "Mobile On-Site Fueling", 10-16-09
* "The Bees Are Still Buzzing: Handling Fuel on a Daily Basis", 10-23-09
* "Fleet Fuel Card Shopping", 10-30-09
* "Is Your Fuel Management Ready for Winter?", 11-6-09
* "Don't Let the Weather Freeze Your Deliveries", 11-13-09
* "Fuel Management or Fuel Inventory? That is the Question", 11-20-09
*
"Put Your Fleet Fueling Policy in Place For 2010, Part I", 12-4-09
*
"Put Your Fleet Fueling Policy in Place For 2010, Part II", 12-11-09
*
"Be Safe, Not Sorry With Fuel Management During the Holidays", 12-18-09
*
"Looking Back: 2009 Fuel Management in Review", 12-23-2009
*
"Oil's Ups and Downs", 1-8-2010
*
"Why Oil Does What It Does When It Comes to Prices", 1-15-2010
*
"Controlling Fuel Efficiency When Fuel Prices Are Unpredictable", 1-22-2010
*
"The Motivation Behind Mobile Fleet Fueling", 1-29-2010
*
"Fleet Fuel Prices: What are They Now?", 2-5-2010
*
"Fuel Managem

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