Reducing Illicit Fuel Fraud and Recovering Revenue for National Governments around the World
By Andrée Bourgeois, Senior Marketing Manager, Authentix
The impact on national governments from adulterated, diluted, and illegally trafficked fuel within a country’s borders results in lost tax revenue, poor quality product, environmental issues, and ultimately reduced community services and benefits for citizens. After 25 years of working with dozens of government ministries and leaders to implement fuel integrity programs across the globe, Authentix has helped many countries expand revenue collections by reducing or eliminating the proliferation of tax avoidance and illegal profiting through illicit fuel sales. Many countries that implement an Authentix fuel integrity program quickly see reductions of this illegal activity by more than 30 percent annually with corresponding increases in taxation revenue.
Our experience and years of data has proven that implementing fuel integrity programs has substantial benefits to many national governments and its citizens alike, providing very high returns on investments made. Many governments have published data showing the positive impact of securing and monitoring their fuel supply including Ghana, Serbia, Zambia, South Africa, and most recently, Kenya published an article further confirming the effectiveness of its fuel integrity program. As stated in the publication businessdailyafrica.com, Kenya’s Energy and Petroleum Regulatory Authority (EPRA), which is mandated under Section 92 of the 2019 Petroleum Act, is charged with monitoring petroleum products offered for sale in the local market and has continued to enhance its fuel integrity program with tremendous outcomes. As a result, Kenya continues to reduce fuel adulteration and is well on the way to achieving near 100 percent reduction of fuel fraud.
To mitigate adulteration challenges, many governments such as Kenya have taken action to implement national fuel integrity programs curbing fuel fraud, recovering missing tax collections, and restoring confidence in the national fuel supply. These programs are continuing to grow in number and scope as technology advancements result in more sophisticated enforcement techniques as well as building a history of data retention, correlation, and actionable insights over time. As programs remain implemented, product and supply chain data are collected over multiple points in the supply chain — providing organizations complete visibility of trends, reconciliation issues, and machine learning capabilities to help prevent, correct, enforce, and ensure ultimate compliance.
Most fuel integrity programs in place today involve chemically marking fuel at refineries and/or terminal distribution points to ensure that all fuel in the downstream supply chain can be authenticated all the way to retail points of sale. The fuel is typically marked by dosing with an inert, organic chemical marker at levels so low (parts per billion), the presence of the marker cannot be detected without proprietary and highly sophisticated devices. As fuel is sampled and tested in supply vehicles, retail stations, and even consumer vehicles, it is possible to determine if the fuel has been diluted with substandard or non-taxed products such as waste oil, off-road tax-free fuel, or via other illicit means. The detection technique enables accurate quantification using portable analyzers in the field or more enhanced, forensically defendable methods in a laboratory.
Authentix is the market leader throughout the world delivering these solutions and has become a trusted and effective partner for national governments to validate fuel quality and supply authenticity, and provide the tools to enforce and prosecute those whom are trafficking illicit fuel products. Authentix continues to build its large library of unique covert markers, resulting in the highest level of authentication security and effectiveness available today. Authentix has spent decades building its suite of custom markers which take many different forms and vary in application and use based upon the country’s unique set of requirements.
The return on investment of successfully deployed fuel integrity programs by Authentix is substantial, helping governments recover millions in lost tax revenue each year, while positively impacting the society through expanded services and infrastructure and resulting in a cleaner environment for all.
Andrée Bourgeois is Senior Marketing Manager for Authentix. As the authority in authentication solutions, Authentix thrives in supply chain complexity. We provide advanced authentication solutions for governments, central banks and commercial companies, ensuring local economies grow, banknote security remains intact, and commercial products have robust market opportunities. Our partnership approach and proven sector expertise inspires proactive innovation, helping customers mitigate risks to promote revenue growth and gain competitive advantage.