The “party” in fuel smuggling continues, with the losses to the public coffers being huge.
The title of my note is copied from Chrysa Liangou’s extensive report in “KtK” of December 3, 2023. The key words are “endless” and “party”. The “party” is substantiated by the fact that the Panhellenic Federation of Fuel Dealers (POPEK) in its earlier assessment (2017) estimated that in the last 20 years, 25 billion euros have been lost from public funds due to illegal fuel trafficking. While the “KtK” report estimates that today the state loses 250-300 million euros on an annual basis, which is much more. The “endless” is documented by the fact that in 2007 the effort was started which was later “buried” and during the brief prime ministership of the GAP (2011-2012) another failed attempt was made to deal with the problem.
Once again I will bless my beard. On 12.3.2017 I wrote in this column on the subject entitled “Fuels that burn public revenue”, from which I copy an extensive excerpt. Today, in fact, it is more relevant than ever!
“(…) The subject is very large and complex. I have no intention of analyzing it. I will refer only to one aspect of the problem which proves once again the sloppiness with which we deal with the big issues in our country. As the Anglo-Saxons say: “If you fail to plan, you are planning to fail”.
I’m sure you’ve all heard or read about the famous inlet and outlet systems that by law (many laws) should be installed at gas stations and elsewhere. We were led to believe that installing the inlet/outlet systems would solve the problem. Already 98% of gas stations have been equipped with such systems. But unfortunately, things are more complicated. The installation of the systems is a necessary condition, but it is not capable of solving the problem.
Liquid fuels are traded and traded by volume (litres). As we all remember from physics, volume changes with temperature. High temperature greater volume and vice versa. In fact, liquids contract and expand much more than solids. Thus a gas station can receive 20,000 liters and “sell” more or less without either stealing or incurring losses, depending on the receiving temperature and the delivery temperature. Precisely for this reason, the data collected by the input / output systems require significant processing to be usable. This is precisely where the difficulty of the undertaking lies.
A little arithmetic and you will see the size of the problem. Within a year, the fuel available at the stations is approximately 4.5 million tons. If we assume that in each filling the vehicles put 30 liters of fuel, a quantity that is very high for the average, we have that within a year there are about 150 million outflows throughout Greece, that is, about 411,000 records are created every day from all systems inputs / outputs! Each record consists of several elements: station ID, pump, fuel type, day and time and more. That is, we have millions of data every day. These are the ultimate definition of Big Data which can only be harnessed with IT. Looking for discrepancies and trying to correlate the inputs and outputs of a gas station is like the proverbial “flea in the haystack” search.
At this point a unique Greek pathogenesis enters. Instead of seeking and adopting how this complex issue is handled abroad, we decided, as usual, to solve it ourselves. You see we have a national allergy to copying successful actions from other countries, because we have to constantly prove that we are the smartest people in the world and can do everything better than everyone else, who ate acorns while we were building Parthenons.
I don’t intend to bore you with technical details. In very simple words I will describe to you how they have solved the problem in other countries. For those who don’t want to “do it all themselves”, there are specialized companies that provide services in fuel management (Wetstock Management Services). These receive the raw information (raw data) from the input / output systems and with specialized software they have developed analyze the information and identify possible cases of deviations. Afterwards, specialized analysts focus only on the possible cases and if they find substantial discrepancies, they inform their “client” of any problems and on-site inspection. In this way, the controls are targeted at the gas stations that come out of the “sieve”, which is why they are very effective. In this way deviations, thefts at the pumps and accidental leaks at the tanks are detected. Their fee is per pump they monitor. The great benefit of this service is that you pay for the accumulated experience of the company, the software and the experts. It is worth noting that such services are provided beyond the borders of a country. For example, a company based in England provides its services in Australia and other countries. But of course they don’t make us!
And some facts to see how effective we are. In 2014, 27,365 checks were carried out and yielded 18 million euros. In other words, the state collected 658 euros per control!!! They probably cost us more than we got. In the first half of 2016, 1,702 checks were carried out and we collected the unimaginable amount of 1.97 million euros in fines, i.e. 1,157 euros per check! Bravo to us. These occur naturally when the controls are random rather than targeted. When you shoot at random, you rarely hit the target.
And of course, the constant chorus is heard: officials of the Ministry of Finance talk about the understaffing of the service, with the result that not only are there not enough personnel for more checks, but they note that the input / output data sent by the stations electronically are not checked, as a result a system that cost tens of millions of euros to the Greek State does not work.
And yet, we don’t need more controls, but fewer and targeted ones. A recent study by the NTUA found that 1 in 10 gas stations are stolen. There are currently around 3,500 gas stations in Greece and 10% are just 350 gas stations. That is, if after sifting we ended up checking only the possible stealing stations, we would only need 350 checks.
As I have written many times before, solutions exist for all issues because others have faced them before us. I’m convinced that we don’t want them.”
As you can see, I also indicated the solution to the problem, but to no avail. Now I can even reveal to you that I personally presented the proposal to “authorities”, but I got the answer that “we will do it ourselves”. There is no point in revealing to you the time (well before 2017) and the service, because my purpose is not to expose persons, but to scorch wrong practices.
When there are ready-made tested solutions that other countries use, I can’t understand why we don’t “buy” them, but think that we will do them better and cheaper. We lose 250-300 million euros a year, but we refuse to pay a minimum amount because we have an allergy to the private companies that provide services. I still maintain that we are the last Soviet of Europe, where everything private is satanic. We are and will remain statists, even if we pay dearly.
Deep down I think we don’t want to solve the problem. Where there is order, the honest and the householders are comfortable. Where there is clutter, many others are comfortable. And it’s a lot of money!
Once again I want to make a necessary clarification. I have no affiliation with any company providing such services nor do I wish to promote any particular one. A Google search for ‘wetstock management services’ will turn up a plethora of companies that provide these services. A cursory contest is more than enough and the problem is solved. Is anyone listening?
Text: Andreas Drymiotis
Mr. Andreas Drymiotis is a business consultant.