In the last 12 months, the National Measurement Institute (NMI) has publicly reported a sustained increase in the number of fuel nozzles that are not compliant with national Trade Measurement Legislation. The increase in non-compliance was first observed in the 2016-17 financial year and has continued to grow in subsequent years – to the point where the percentage of non-compliant dispensers detected in 2018/19 was approximately double the levels observed four years earlier.

ACAPMA has been working with NMI over the past 18 months to understand this issue in detail – and the factors that are likely to be contributing to it.

“Interestingly, the NMI data on non-compliant dispensers reveals that there has been a doubling of nozzles that are short filling – as opposed to overfilling”, said ACAPMA CEO Mark McKenzie.

The NMI estimates that the extent of short filling equates to motorists paying between $5M and $15M for fuel that they didn’t receive (i.e. short fills) and industry losing around $1.7M (i.e. over fills).

NMI General Manager of Legal Metrology, Mr Bill Loizides, advised that the NMI would be undertaking an intensive retail fuel audit programme – or Regulatory Blitz – during the second half of March 2020. The blitz would incorporate inspections at around 600 sites nationally and would include retail sites where breaches have been observed in recent years.

To better understand the issue, and canvass industry opinion on what can be done to meaningfully address this issue, ACAPMA hosted a workshop in Melbourne this week with industry stakeholders and senior representatives of the NMI.

The NMI presented a series of data insights about the issue, albeit that this information was constrained by the Regulator’s legal inability to disclose specific details of fuel retail businesses. This data revealed that there are no specific geographical patterns in the breaches detected to date and that the problem appears to be occurring across all fuel retail brands, regardless of size.

“Workshop participants discussed the possible causes of the problem but the lack of clear trends in the compliance data meant that it was not possible to draw definitive conclusions about likely cause”, said Mark

The key point that was made was that even though the incidence of non-compliant pumps is relatively small, with just over 90% of all pumps tested being compliant with measurement law, this issue came down to consumer trust.

“Australian consumers cannot see or measure the fuel being dispensed into their vehicle’s tank and so we must take all reasonable steps as an industry to assure our customers that they are getting the volume of fuel that they are paying for at the pump”, said Mark

The workshop conversation also considered what could potentially be done by industry to address this issue, despite the absence of definitive data on specific cause.

The NMI representatives presented data showing that Australia was just one of eight (8) OECD economies that did not require mandatory verification of fuel dispensers on a periodic basis. Of the remaining 38 economies that do require verification, 20 economies required verification on an annual basis while a further 10 required verification on a 2-year basis.

The NMI went on the state that the Australian government is currently undertaking a review of Australian Measurement Law, including regulation of fuel dispensers, but that the clear preference of government is for the industry to self-regulate.

“The development and implementation of an industry code of practice is clearly preferable to the imposition of black-letter legislation on our industry”, said Mark

Workshop participants agreed that there was significant merit in exploring the opportunity to develop a Best Practice Guideline (BPG) for the regular calibration of fuel dispensers. It was suggested that the scope of such a Guideline might include:

  • Identification of a regular interval for pump calibration (e.g. 1 year or 2 years), with a requirement to maintain records of same for review of regulators in the event of a site inspection. This requirement would be in addition to the existing legal requirement for both new fuel dispensers to be verified following installation and for all in-service pumps to be re-verified each time the pump seal is broken for maintenance and repair work
  • Identification of the key skill requirements of calibration personnel. Workshop participants noted that one of the sources of the current issue might be substantive differences between the skills of industry verification personnel (particularly in-house staff) and NMI inspectors.
  • Provision of a recommended practice for management of complaints involving fuel measurement, with due consideration to both the customer issues and legal issues associated with these types of customer complaints.

Importantly, the workshop noted advice from the NMI representatives that fuel pumps dispensing volumes on commercial sites (e.g. car rental companies refuelling customer vehicles and transport companies providing fuel to sub-contractors) are also required to comply with Australian Trade Measurement Laws.

ACAPMA CEO Mark McKenzie advised that the scope of work cited above would be referred to a working group for the development of a new Best Practice Guideline (BPG).

ACAPMA is now seeking expressions of interest from industry stakeholders who would like to participate in the new Nozzle Measurement Working Group. Individuals wishing to nominate for the working group should email Mark McKenzie (markm@acapma, before COB on Friday 20 March 2020.