Fuel inventory management: reading your tanks before they read you

Fuel is usually the largest number on a station's books and the one owners look at least closely day to day. Inventory management is the habit of knowing, at any moment, how much fuel you have, what it cost you, and whether the gallons you sold match the gallons that left the tank.

Three numbers to watch

Tank level, in gallons and in days. Gallons on hand matters less than how many days of sales it covers. A tank at 30 percent on a Tuesday may be fine; the same level before a holiday weekend may not be.

Last received cost. What you paid per gallon on your most recent delivery is the floor under your pump price. If you do not know it on the day you change prices, you are pricing blind.

Variance. The difference between book inventory (what should be in the tank, given deliveries and sales) and physical inventory (what the tank monitor or a stick reading says is in it).

Understanding variance

Some variance is normal. Fuel expands and contracts with temperature, meters have tolerances, and readings are not perfectly precise. What you are looking for is not zero variance but variance that behaves:

• Small differences that go both ways and roughly cancel out over a month are normal.
• A variance that keeps leaning in one direction, day after day, deserves attention. Possible causes include meter calibration, delivery shortages, recording errors, or in the worst case, a leak or theft.
• A sudden jump on one day usually means a delivery was recorded wrong or not at all.

If you see a persistent loss, take it seriously. Your tank monitoring records, your release detection requirements and your state's environmental rules exist for a reason. Talk to your equipment provider and, where it applies, your regulator.

Deliveries are where errors enter

Most inventory confusion starts at the delivery:

• Check the bill of lading against what arrived. Gross and net gallons, product and tank. Note any difference before the driver leaves if you can.
• Record it the same day. A delivery entered three days late makes three days of variance look wrong.
• Watch the timing. A delivery during heavy sales makes before and after readings harder to compare. Note the time.

Ordering with more than a feeling

Running out costs sales and goodwill. Ordering too early can mean paying more than you needed to or not having room for a full load. A simple approach:

1. Know your average daily sales by product, by day of week.
2. Know your supplier's lead time and minimum load.
3. Set a reorder point for each tank in days of supply, not gallons.

Where software helps

A back-office portal that shows current tank levels and last received prices side by side removes the guesswork from both pricing and ordering. The WRK Fuels portal shows current fuel inventory and last received fuel price by product on its dashboard. Exactly which tank data appears depends on your equipment and setup, which we confirm before you start.