The Company
A regional petroleum distributor operating in the central US, with 18 bulk fuel storage and distribution facilities ranging from small 2-tank rural depots to large 8-tank urban distribution centers. Combined throughput: approximately 180 million gallons annually, across diesel, regular unleaded, premium unleaded, and aviation fuel.
Annual fuel revenue at stake: approximately $630 million at the time of deployment.
The Problem
The 2.1% Variance Reality
Like most petroleum distributors, this company performed monthly fuel inventory reconciliation: delivered volume + beginning inventory - dispensed volume - ending inventory = variance. The variance calculation was accurate; what it couldn’t tell them was why.
At 2.1% annual variance across 180 million gallons, the company was losing approximately 3.78 million gallons per year — fuel that was delivered, that should have been dispensed and invoiced, but couldn’t be accounted for in the records.
At an average blended product cost of approximately $3.00/gallon, 2.1% variance represented $11.3 million in unaccounted fuel cost annually. The finance team had internalized this as cost of goods, not as recoverable loss.
The Monitoring Fragmentation
The 18 facilities ran monitoring systems from three different vendors — a legacy of acquisitions and procurement decisions made by different regional managers over 15 years. Getting a current tank level picture across all 18 facilities required logging into three different monitoring portals. Delivery reconciliation was done manually, facility by facility, at month end.
No one in the company had a real-time multi-site inventory view. Visibility into current tank levels required phone calls to individual facility operators.
The Solution
The company deployed ArgusIQ across all 18 facilities over a 90-day rollout period.
Connectivity: ArgusIQ IoT Hub connected to all three existing ATG vendor systems via Modbus TCP and vendor API integrations. No ATG hardware replacement was required — all existing ATGs continued operating with ArgusIQ as the aggregation layer.
Asset registry: Each tank at each facility registered in ArgusIQ Asset Hub with its identity record: facility, product, capacity, ATG model, regulatory category (UST or AST), last calibration date.
Delivery tracking: Delivery manifest data integrated from the dispatch system. Each delivery event captured in ArgusIQ: pre-delivery level, post-delivery level, manifest quantity, variance calculation.
Dispensing data: Point-of-sale transaction data integrated from the facilities’ POS systems. Cumulative dispense volume by product per shift linked to tank level changes.
Multi-site dashboard: A single portfolio dashboard showing current inventory levels at all 18 facilities, current-month variance by site and tank, delivery summary, and active alerts.
The Findings: Three Variance Sources
Within 90 days of having real-time visibility across all 18 facilities, three distinct variance sources became visible. None had been identifiable from monthly reconciliation.
Source 1: Overnight Level Drop at Two Facilities
ArgusIQ’s overnight analysis flagged two facilities where tank levels were dropping measurably between the close of business (last dispense transaction) and the start of next-day operations — not from evaporative loss alone, but at rates inconsistent with vapor loss calculations.
Both facilities had older underground steel tanks. The overnight level drop pattern was consistent with slow leakage below EPA release detection thresholds (which are measured in gallons per hour; these drops were at rates that fell below the monthly reconciliation detection threshold).
Investigation confirmed subsurface release at both locations. Both were remediated. The combined contribution to annual variance from these two facilities: approximately 0.6 percentage points.
Source 2: Delivery Variance from One Carrier
Delivery variance analysis across all carriers showed that one regional carrier’s deliveries consistently showed 1.3–1.8% less fuel received (per tank level gain) than the carrier’s delivery manifest stated.
Over 12 months of deliveries, this carrier’s systematic short delivery was contributing approximately 0.5% of total annual variance.
The company confronted the carrier with the ArgusIQ delivery variance records. The carrier adjusted their metering and recalibrated delivery equipment. The delivery variance from this carrier dropped to within ±0.2% after the intervention.
Source 3: Third-Shift Dispensing Anomalies at One Facility
Detailed transaction-level analysis of one facility showed after-hours dispense transactions at anomalous volumes — fuel dispensed in the 11 PM to 3 AM window — at volumes that didn’t correlate with the facility’s typical overnight commercial traffic.
The pattern was visible only because ArgusIQ’s continuous level monitoring showed tank drops at times when the POS system showed low or zero transaction activity — an accounting discrepancy that monthly reconciliation couldn’t detect because the monthly numbers balanced against the POS total, which didn’t show the discrepancy.
Investigation identified unauthorized access to the facility’s dispensing system. The access path was closed and site security procedures were updated. Contribution to annual variance: approximately 0.7%.
The Results
Variance Reduction
Year 1 post-deployment:
- Variance at start: 2.1%
- Variance at end of year: 0.4%
- Variance reduction: 1.7 percentage points variance eliminated
- Recovered volume: approximately 3.06 million gallons annually
- Recovered value at blended product cost: approximately $290,000 annually recovered
The 0.4% residual variance is within the range attributable to ATG measurement accuracy, temperature-related volume variation, and normal operational factors.
Operational Efficiency
The operations director’s morning portfolio review — previously a phone call process to get current tank levels from facility operators — became a 10-minute dashboard review in ArgusIQ. Total daily monitoring time for the multi-site portfolio: reduced from 90 minutes to under 20 minutes.
The monthly reconciliation process — previously a 3-day manual assembly of records from three monitoring portals — became an automated monthly report generated from ArgusIQ. Manual reconciliation time: reduced from 3 days to 2 hours.
Regulatory Compliance
ArgusIQ’s continuous level monitoring satisfies UST monthly inventory reconciliation requirements for all 18 facilities. The monthly regulatory documentation is generated from ArgusIQ records rather than assembled manually. The two subsurface release detections — identified through ArgusIQ’s overnight analysis before they would have been detected in monthly reconciliation — enabled earlier regulatory notification and remediation than would have occurred under the prior monitoring approach.
What the Company’s Finance Team Now Knows
— VP Operations, regional petroleum distributor
The finance team now uses ArgusIQ variance data in quarterly operational reviews. Sites running above 0.6% monthly variance trigger investigation rather than being recorded as “within normal range.” The accountability baseline has permanently shifted.
Talk to our team about ArgusIQ for your petroleum distribution or multi-site fuel operation.