Consignment Fuel Visibility

What Is Consignment Fuel?

Consignment fuel is a business arrangement in which a petroleum wholesaler or distributor delivers fuel to a retail location — such as a convenience store or gas station — but retains ownership of that fuel until it is actually sold to the end consumer at the pump. The retailer never purchases the fuel outright. Instead, they act as an agent selling the supplier’s product and earning a per-gallon commission on each transaction.

This differs from the traditional wholesale model, where the retailer purchases fuel at a wholesale price, takes ownership upon delivery, and assumes the risk of price fluctuations and unsold inventory. Under consignment, the supplier bears the inventory risk and manages pricing, while the retailer focuses on operating the station and maximizing throughput.

How It Works

1. Delivery — The supplier delivers fuel to the retailer’s underground or above-ground tanks
2. Ownership — The fuel remains the supplier’s property while it sits in the tank
3. Sale — When a consumer purchases fuel at the pump, the transaction is recorded by the POS system
4. Billing — The retailer is invoiced only for gallons actually dispensed, typically priced using industry benchmarks (such as OPIS) plus a contracted markup
5. Commission — The retailer earns a fixed or variable commission per gallon sold
6. Replenishment — The supplier monitors inventory levels and schedules the next delivery

Why Operators Choose Consignment

• Reduced capital requirements — no need to purchase fuel inventory upfront
• Eliminated price risk — fuel price fluctuations are the supplier’s concern
• Simplified operations — the supplier manages replenishment scheduling
• Improved cash flow — costs align with revenue since payment follows sales

Why Suppliers Offer Consignment

• Guaranteed retail placement — fuel is sold through the operator’s station
• Volume control — the supplier manages inventory and delivery timing
• Pricing control — the supplier sets consumer pricing strategy
• Broader distribution — enables expansion into independent retail locations without owning the station

The Data Challenge

The consignment model depends entirely on accurate, timely data. Both the supplier and the operator need reliable answers to the same questions:

• How much fuel is in each tank right now?
• How much was dispensed since the last delivery?
• What were the exact sales volumes, by product, by day?
• When does the next delivery need to happen?
• Are there discrepancies between deliveries, tank levels, and POS sales?

Without reliable data, consignment operations suffer from billing disputes, inventory discrepancies, missed deliveries, and runouts — all of which erode the trust and efficiency that make the consignment model work.

Why Kii Is Built for Consignment

Kii Tank Management was designed from the ground up to address the data requirements of consignment fuel operations. The combination of near-real-time tank monitoring, POS sales data integration, and automated reporting provides the transparency that both suppliers and operators depend on.

Near-Real-Time Inventory Visibility

Suppliers managing consignment fuel across hundreds of operator locations need to know what is in every tank at all times. Kii provides near-real-time fill levels, ullage, and delivery detection across the entire portfolio — enabling proactive replenishment scheduling and preventing costly runouts.

Accurate Consumption-Based Billing

The core of consignment billing is matching dispensed volumes to invoices. Kii captures POS sales data — including fuel grade, volume, price, and transaction details — directly from systems like Gilbarco Passport over secured channels. This data flows automatically into the Kii platform alongside tank level readings, giving both parties a single source of truth for billing reconciliation.

Delivery Reconciliation

When a delivery arrives, Kii detects the fill event and records the pre-fill and post-fill levels. Combined with sales data between deliveries, this creates a complete audit trail: what was delivered, what was sold, and what remains. Discrepancies between expected and actual inventory are surfaced immediately rather than discovered weeks later during manual reconciliation.

Multi-Site Portfolio Management

Consignment suppliers typically manage fuel inventory at dozens or hundreds of independently operated locations. Kii’s dashboard provides portfolio-level visibility with filtering by operator, location, product type, and status — enabling a single dispatcher or account manager to oversee the entire consignment network efficiently.

Scalable Deployment

Kii supports the deployment models that consignment operations demand at scale:

• Cellular gateway for sites without existing network infrastructure — installs in 10 minutes
• Hardware-less IP/VPN for large operators with existing IT infrastructure — no per-site hardware cost
• Above-ground sensors for bulk storage and secondary tanks outside the ATG system

This flexibility allows suppliers to deploy monitoring across their entire consignment footprint regardless of site infrastructure differences.

Environmental Compliance

In many consignment arrangements, the fuel supplier bears liability for the fuel in the operator’s tanks. Kii’s environmental compliance module tracks leak test results, alarm history, and regulatory status for every site — giving suppliers visibility into compliance risks across their consignment portfolio.

The Business Impact

Operators using Kii for consignment fuel management report:

• Fewer billing disputes — automated data capture replaces manual readings and estimates
• Reduced runouts — continuous visibility enables proactive delivery scheduling
• Lower operational overhead — 4 hours saved per station per week through automated monitoring
• 5x return on investment — demonstrated across 200+ consignment locations
• Improved supplier-operator trust — both parties work from the same data

Case Study: Colonial Oil Industries

Colonial Oil Industries, a major petroleum distributor, deployed Kii’s platform across their network of over 200 consignment-operated stations. The system connects to ATGs at each location, delivering near-real-time tank data, environmental compliance status, and operational alerts to a centralized dashboard.

Results

What They Said

“We installed the Kii software at over 200 of our stations and the technology has saved my company four hours of manpower per station each week. This solution has provided us with a five-time return on investment.”

“Kii is a strategic partner to us, and has delivered on their commitment to support both our current needs and new requirements as our business evolves. This solution is highly reliable and can be quickly set up by our field sales personnel.” — Ray Bordeaux, Vice President Dealer Sales, Colonial Oil Industries, Inc.

The time saved and the insights provided enable companies like Colonial Oil Industries to focus on managing and growing their business. With all the information needed to manage their wholesale business on a single platform, the business can continue to scale efficiently.