It is time for Nigeria to move from heavy cash-based fuel station operations metric to a more cashless based operations to compete with counterparts in other emerging markets.
This was disclosed by Ayodeji Ogundiran, Managing Director/Chief Executive Officer, Fuelmetrics Incorporated, a technology-driven company with major focus on oil and gas in an exclusive interview with Nairametrics.
According to him, in urban areas in Lagos, one can find high usage of ATM cards and all that, but once you move outside the urban areas and go into the other states, you will find that 70% of the operations in the filling station is still cash.
What Fuelmetrics boss is saying about shift
He said, “The biggest effort we are making now is helping the country shift from a heavy cash-based gas station operation or fuel station operation metric. In urban areas in Lagos, you can find high usage of ATM cards and all that, but once you move outside the urban areas and go into the other states, you will find that 70 percent of the operations in the filling station is still cash.
“This exposes the stations to a lot of risks. We hear of cases of attacks by armed robbers, because they know these guys have a lot of cash and they go to attack them. So, we are helping stations reposition their operation such that we can reverse that trend to more of a cashless transaction base. They could use their bank card in a connected transaction, they could use vouchers and bank cards as I described earlier or they could use fuel cards. Those are the kind of directions we are investing energy in the industry, to move this industry away from cash-based and all of that.
“As well, what we are also doing is that there is the knowledge that fossil fuel as we know it, is dying gradually. But one thing will not die. People are in the energy business. The energy they sell will change but they will still need to sell energy one way or the other. So one of the other researches we are doing behind the scene is how to help these entrepreneurs, these business owners, which is the retailers, how to help them future-proof their business. If you need to replace your fuel pump with EV chargers, what efficient ways can you do it?
“If the future is hydrogen fuel, how can you transfer or upgrade your infrastructure from fossil fuel to hydrogen fuel and all that. When there is a technology partner, like we are, it is easy to address the industry as a whole and say this is a new trend and this is where you should be going. In the coming months, we will be seeing a lot of investments in LPG, CNG.”
If there are investments in LPG and CNG, he added that cars will begin to convert from petrol to CNG and all of that. “We are making our technology available for all of them, such that even if you decide to do financing for your customers; say the cost of upgrade from petrol engine to CNG engine, how do you ensure that these customers stay loyal to you? So we are building technology to ensure that they stay loyal to you, using the KYC, knowing your customers because that is really the only way you can serve your customers optimally, right? And the beautiful thing is that whatever we do here, we should be able to scale outside the country to other markets where we are present.”
When asked on solution to the lack of access of marketers to fund, especially from banks, the Fuelmetrics boss explained that finance, for every business, is always a component.
“And permit me to use FMCG for fuel in this case (fast-moving consumer goods); they churn out a high volume every day. Working capital is an issue. And like every other business, when they go to the bank, there is a lot of bring this, let’s do this… Banks still don’t have a way to drive into the business to understand the pattern but with e-pump, we are able to show you a clear pattern. This is how much this station makes every day on average. If you lend to this person, X amount of money, this is how long it is going to take him to repay it. In the past, a lot of our customers (the more structured ones) have leveraged these data to approach the banks and get financing.
“However, we are taking it a step further. We are actively partnering with financial institutions such that stations using e-pump can, via one phone call, and very soon, via one click on the button, say I need financing for 100,000 litres of product and expect a decision within 24 hours, and within 48 hours expect to get the product. The banks which are our partners are also happy because the stations are no longer waiting six months or three months before they remit. They are remitting on a daily basis because now there is visibility. We know you made one million naira today so all we are saying is remit 800,000 out of it and keep 200,000 for yourself, he added.
About Fuel Metrics INC
Fuelmetrics INC is a leading automation and solution development company operating in Nigeria. The company was born out of a need to fill the gap in the provision of top-notch automation and software solutions, particularly in the downstream oil and gas sector.
Epump is a fully automated and integrated solution developed for fuel stations owners to equip them with everything they need to maximize the potential of their businesses. It is a solution that gives the fuel station owners the ability to remotely monitor and control the daily transactions at their stations, while also reducing the stress associated with such an enterprise.