Fuel irregularities disabling underway – Oil derivatives marking brings security to customers and prevents illegal trade

Stable supply of quality fuel, prevention of illegal trade in oil derivatives, and tens of millions of euros in savings for the state are only few of the benefits which the overall fuel quality control system will bring. Namely, the process of oil derivatives marking started February 1 and process was entrusted to consortium of the companies, SGS, Authentix and Nanoinspekt.

Tradition of illegal trade in Serbia traces back when common supplying ways were not possible. Consumers still do not get fuel of promised quality even if market supplying was provided. A part of fuel reaches gas stations through illegal channels so sellers do not pay taxes and consumers often get gasoline and diesel fuel with kerosene, euro diesel with gas oils, BMB-98 with mixture of BMB-95...

Apart from fuel mixing, illegal transport from Bosnia and Herzegovina across the Drina river, Romania across the Danube as well as purchase of fuel from NIS for Kosovo which is tax-free and then redirected to sales in Serbia, are often considered to cause decrease in oil derivatives quality.

According to the Ministry of Energy, black market sells 5-10 % of entire fuel quantity so neither VAT nor excise tax is paid for it while customers pay full price. Oil derivative marking will prevent fuel flow which is not properly marked. This would, according to the latest estimations of the Ministry of Energy, increase budget income for some EUR 40 mil.

How will fuel be controlled?

(Photo: Marija Kambić)

Oil derivatives marking is a process of adding certain quantity of nano markers into oil derivatives for the purposes of set up and control of oil derivatives market flow. Nano marker for oil derivatives is the same thing as excise tax for alcohol and tobacco control. Fuel which arrives through legal channels to the market contains nano marker. This simplifies control i.e. if there is no nano marker in fuel, it is obvious it is illegal. More precisely, it is not important only that fuel contains nano marker but also that concentration is at the adequate level

This way, adding irregular fuel into regular will be prevented. Such a mix would contain markers but in decreased concentration which would automatically point out mixing. Anyhow, if unmarked fuel is found at the gas station, rigorous penalty of up to three million dinars with a ban on work up to three years follows.

Nano mаrker is a compound based on nanotechnology which, after added to oil derivatives, is stable, without color and smell, with highly-sensitive detection devices. The structure of nano markers which mark fuel is, of course, secret to prevent false fuel marking.

As Nanoinspekt company says, maker not only influences physical-chemical features of oil derivatives but it homogenize with oil derivatives after adding which means it does not affect fuel quality. Apart from that, as the representatives of this consortium member say, marker is completely safe for managing and for environment and the employees’ health.

Benefits for consumers

Naonoinspekt explains that benefits for consumers when it comes to implementation of this system are better fuel quality, security that they buy fuel which complies with defined standards, decreased consumption, cost reduction and longer period of motor usage.

Benefits for oil companies

The Serbian association of oil companies mentions that they support every move of the state which leads to grey market elimination.

- Fuel marking and the thing which is equally important, additional intensive and overall control of marker presence, is useful for UNKS oil companies-members and the most important benefit will be generated through removal unfair competition. As of its set up in 2010, UNKS has started more initiatives which lead to market set up with a different level of understanding of official state institutions. The most common problem has been emerging in insufficiently synchronized coordination between different ministries which, thanks to the Ministry of Energy which took over this issue, will be solved hopefully – Micovic points out.

Companies-members of UNKS will mostly benefit from fuel quality monitoring system and unannounced controls which should comprise bigger number of energy subjects ranging to reservoir fuel control, first of all, of business vehicles.

- Control solely at gas stations of relevant companies such as NIS, OMV, Lukoil, EKO, MOL, AVIA, will not bring anything because they do not have mixed non- excise taxes or derivatives form illegal channels. Therefore, it is important that regular controls comprise all fuel consumption places – Micovic points out.

Serbia has the most modern control system

Fuel marking within special programs is used all over the world and the states and oil companies use it in order to monitor their fuel flows. Serbia is among the first countries in Europe which is implementing the overall fuel control system through nano markers because other countries are still using some more simple systems such as fuel coloring which turned out to be inefficient because it is easy for falsification.

As Nonispekt said, Serbia will be the first country which will apply the most modern nanotechnology which will enable investment based on the savings generated through the program, pays off for a period of less than 60 days, by preventing illegal fuel flows.

In 2014, leading and the biggest world company operating in control field, SGS, should pour EUR 2 mil in facilities and equipment for fuel quality control in Serbia.

We will invest in facilities for testing and storage of fuel samples as well as in fuel testing equipment - Marinko Ukropina, General Manager of SGS for Serbia, Slovenia, Croatia and Bosnia and Herzegovina, announced in late 2013.

Consortium SGS, Autentix and Nanoinspekt

Marker-based fuel control system comprises two main stages - marker adding into fuel and marker concentration control on points of sales. As for marking, during 2013, the Ministry of Energy, Development and Environmental Protection released tender which SGS Beograd won. It is a branch office of the Swiss SGS which is among the world leaders in the field of inspection, verification and quality control. They employ more than 80.000 people worldwide who work in more than 1500 branch offices.

Specially trained staff in the SGS company will be in charge of nano marker adding. The nano marker and analysis devices are produced by Authentix, the company which participates in fuel marking programs worldwide. It is headquartered in American city, Dallas and the European headquarters is in Great Britain. The distributor of the Authentix company for the Serbian territory is Nanoinspekt.

Special teams with market inspectors will carry out fuel marker level controls. When they find irregular fuel, laboratory will carry out additional control.

Suzana Obradovic