Ayodeji Ogundiran, CEO/Co-Founder, Fuelmerics Limited, in this interview with BusinessDay’s Frank Eleanya speaks on the Epump, a technology-based solution that enables owners of fuel stations to get control of their pump and earn more revenue from monitoring what goes out from the pumps and what comes into the station’s purse. The solution is also ideal for individuals who have to send their drivers often to buy fuel.
I was looking at your profile, I saw IT analyst, I didn’t see anything about the oil and gas sector. So what’s the intersection between you and fuel?
My background is in IT and software engineering. Software engineers typically provide solutions to different industry verticals and we tend to be tainted by experience either based on the people around us or problems we find. For us, it is a thing of growth. We see a lot of situations where these guys keep their records on pen and paper that they can’t refer to in the future, and that caught our attention. At some point, in my own career, I was working in a firm that was consulting for downstream regulatory agencies like the Department of Petroleum Resources (DPR), we were consulting for them and during those engagements, we were also interacting with the people who were in the downstream oil and gas industry.
We were able to confirm our bias that these problems that we suspect exist, actually exist which is like you’re running a station and you have a lot of blind spots. You don’t know what is going on in the station until one Mukaila tells you that is how it is sold and you are at his mercy. Whatever he declares is what you can work with until maybe six months down the line, you decide to conduct an audit and you find out that you have lost millions, and by then it is too late. If you arrest him, he spends two days in police custody, and he is out. The intersection is the passion to solve problems, wherever we find a problem as software engineers, we review solutions and we can come in.
How wide or large is this problem?
In Nigeria, the federal government says they spend over N1.5 trillion on fuel. By survey and research we carried out, the offshoot percent of that is lost in the value chain due to poor feasibility or lack of accountability. If you do 10 percent of N4 trillion, you are talking about N800 billion, and being a recurrent spend, it’s not a once and for all, and it gets bigger over time.
What is Fuelmetrics hoping to solve?
The initial problem we tried to solve was for the station owners themselves. These guys have invested millions in setting up a business and the essence of setting up a business is to make a profit. But if you look around, it is not uncommon for you to find a station freshly built, looking all furnished, and three years down the line, you go back to that station and it is becoming a shadow of itself. If you are not careful, two more years, it either closes down or changes ownership. So that tells you there is a problem and the industry has a low margin, so you are making a slim amount per litre. If you don’t have an optimized process or technology in place to help you ensure that you have feasibility, control, you know what is going on, it is very easy for your value to erode. That is the problem we are solving.
We are solving it majorly with technology backed with good services. Our solution equally helps them monitor what is going on in their stations as long as they have good access to the internet. It doesn’t matter where they are physically to know what is going on in their stations, how much you’ve sold, where is this money kept, how much of it is in the bank, how much of it is cash, how much of it is in retainership sales, and things like that. How can you optimize your business? When is the best time for you to open or close?
Data is the lifeline of businesses. If you have good data you can grow your business but without data, you can’t. Now, unlike dry stock where you can count, if I am selling phones, I can count and say how many phones do I have and all of that. You’re dealing with wet stock here. The first point is, what is your data? Technology helps them measure what their revenue is, helps them identify their blind spots, and helps them optimize, that’s for the station. There is also the part of the consumers, it is popular knowledge that if I send my driver to go and buy me fuel, and I give him say N10,000, he is probably going to buy N7,000 if he is the kind one. If he is not the kind one he probably will buy N5,000 which will mean I’m losing money. Now if I was a company that has 100,000 feet and I’m moving 5,000 each time I’m fueling my cars, that means I’m losing N500,000 each time I fuel. If I fuel twice a week, it means I’m losing one N1 million every week. Fuel impacts everybody, whether you are a fueling station or you are the consumer and E-pump is one solution that provides solutions to both parties. We solve for the stations while we also solve for the customers.
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How do you collect your data?
We have a device that we designed, an IoT device that we install in the pump. This device is able to talk to the pump and it summarizes everything transaction, so when you sell five litres, everything is recorded on that platform where you as the station owner can now access it either on your mobile phone or on your laptop provided you have internet access, you can access it anywhere you are.
Specifically, how does it impact the consumer?
Firstly, when a station is using technology, it takes away some of the drop-off points or the theft points. Let’s say I have five stations, I can’t be in the station all at the same time. It means I have to hire people to be in those stations and it’s just a matter of time before I follow a pattern. Sometimes, they know I come on Thursdays, so what happens is there is nothing stopping the manager from colluding with the engineer to adjust the pump and make sure the pump is dispensing less than what the owner will want it to dispense to customers. For the fact that I will not be able to monitor it enough, my customers will bear the burns.
For stations that are using the Epump, the first thing is that because the owner knows directly what is coming out of the pump, it makes no sense for the manager to adjust the pump or to tamper with it. That is the number one benefit to the customers. You are buying from people who have oversight of their stations and are able to put control in place to ensure quality service and quality products.
The other aspect is for corporate organisations. We have devised a means where you are not giving your driver cash, instead, vouchers, or fuel cards which they take to the stations. Our vouchers and fuel cards are verified, different from other cards you have in the market. Other cards are just an understanding of value, our cards or vouchers actually instruct the pump and say dispense X amount of PMS and if it dispenses it, the balance will bounce back to the owner. This means when I send my driver to go and buy N20,000 fuel, he is either going to buy that amount or whatever he doesn’t buy, it reverses back to my wallet.
We have therefore protected the customer in two ways. One, by putting the owner of the station in the know, using that as a quality check, and second by taking away cash and having an automated service to ensure fuel delivery is complete.
We are talking about a large volume of data here, and there are issues around privacy that the NDPR is about. How do you protect users’ privacy?
We are running on the state-of-the-art infrastructure. This is 2022 when most services are relying on proven cloud infrastructure, like Microsoft Azure and all that. Beyond that, we also have our security expert in the house who from time to time take into consideration these things because you don’t wake up to say I am secured. You continue to improvise because the people who want to attack or steal your data are also improvising every day. So we have people in the house who are also doing research every day, fortifying the links, and making sure everything is in safe hands.
Is this a Lagos-based solution or a Nigerian-based solution because oftentimes it appears some tech startups services are Lagos-based. How widespread is Epump?
As of today, we are monitoring operations in 34 states including the FCT out of the 36 states in Nigeria. So it is nationwide. Beyond Nigeria, we are also operational in three other countries, Kenya, Rwanda, and Uganda.
What are the challenges you face, any licensing issues?
None. the only agency interested in what we do, don’t let me say only because like you said before we are a mix of technology, and oil and gas. For the technology side, the guidelines are clear, you just have to obey them. On the oil and gas side, the regulatory agencies also have their own guidelines that you need to follow, you get all of that and you are fine, so we don’t have issues with regulatory approvals.
Any recent funding, I saw that you raised funding in 2014?
We’ve raised quite a number after that, we just haven’t made them public but we are a tech startup. And for most tech startups, at the early stage of their career and business, it is not exactly profit-making. It is about building scale and we always need venture funds to do that. So a lot of companies raise and announce publicly, but there are also companies who are raising privately. We have a number of investors who have invested in us. we have Lofty Inc, and quite a number of other foreign-based investors. So we always raise, we are not just always on the pages of front papers.
What is the traction like?
We are in less than a thousand stations, that’s less than 5 percent penetration, but it is important to note that to date, we have never spent any money trying to market, it’s always been by word of mouth. It means our traction is phenomenal because we are able to deliver optimal service. You won’t refer me to your neighbor if I am not offering you good service. But in the coming months, we hope to spread the message more and get more people involved. Because really, I imagine how painful it is to run an operation in filling stations and not have a solution like E-pump.
What is the market ambition?
As of today, we are the market leader in Nigeria, but we want to take that to the African scale. It is not enough to be a market leader, it is also that we want to move the entire industry from paper-based operation as much as 80 percent, we will be able to move them into a tech-based operation.
