How Blockchain Solves the Fake Motor Oil Problem?

Motor oil is the lifeblood of a vehicle, ensuring that parts are lubricated, cooled, and sealed correctly. Yet, when it comes to fakes, one can hardly talk about any constructive effects, pointing out manufacturers’ income deficiency and even threat to the life of drivers and their passengers.

The days when attentive consumers could spot a counterfeit product by paying attention to package consistency, among other things, are gone. Modern technologies have become increasingly sophisticated, making it harder to distinguish an original product from a counterfeit one.

As manufacturers cannot guarantee full transparency of a supply chain, and some retailers turn a blind eye to selling counterfeit products in the race for profits, fakes have become common in many countries.

Fortunately, blockchain can make a difference by implementing secure and efficient supply chain management practices. Let’s figure this issue out.

What Defines Fake Motor Oil and How Does It Affect Our Vehicles?

Often, fake motor oil contains small metal particles that retain heat. As a result, the entire car engine may be overheating, which leads to its costly replacement.

Low-grade motor oil is often made from recycled oil, yet, you can recognize it by the color that is different from the unused. Used oil is often changed after every thousand miles or so, depending on its raw materials or the model of a vehicle.

In Malaysia, it has become a common practice to reuse cartons of high-grade motor oil. These cartons are filled with the motor oil of a significantly lower grade, then resold at the price of the high-grade motor oil. They also put used motor oil through filters to brighten the color. From there, it is placed into cartons and resold at a lower price.

However, what many of these customers are unaware of is the fact that fake oil can have terrible effects on the vehicle’s performance. Cheaper oil ultimately ends up costing car owners more in the long run. Cheap motor oil can cause damage to a vehicle of hundreds, if not thousands, of dollars to repair.

How Can Blockchain Help?

Customers are often unaware of what they purchase, how proper motor oil should smell, let alone what color it should have. And this is where blockchain comes in to help.

In 2017, the World Economic Forum published an extensive whitepaper about the digitization of the Oil & Gas industry. Per the research, blockchain-enabled digital transformation will add between $1.6 and $2.5 trillion to the overall industry’s value.

Blockchain technology is now used to bring transparency to supply chains. With blockchain, each point in the supply chain would be a node in the chain. At each stage, the new information would be updated and visible to all the relevant parties (authorized members of the network).

Generally, motor oil goes through three stages. The first stage is the production. Then, the oil is packaged, and finally, it is sent to retail. Each step in the chain would be updated.

At production, quality, amount, and specific features would be logged. When packaging, the amount would be checked, updated, and the new packaging information would be recorded on the blockchain. Finally, all this information would be again verified, and the package amount would be affirmed.

Use Cases in Blockchain

As it often happens with innovative solutions to the existing problems, large companies are the ones to take the lead. For now, many of the major industry players use and adopt blockchain-based supply chain solutions.

One of the largest global automotive manufacturers, Groupe Renault, announced the launch of a secure, tamper-proof digital car maintenance book powered by blockchain.

This blockchain-based solution will provide Renault customers with a complete ecosystem, connecting them with insurers, dealers, and repair shops to bring the full transparency of maintenance-related records.

Finally, when it comes to third-world countries like Malaysia or the Philippines, at times, fake motor oil is even preferred there for its low price. Blockchain-based systems could easily prevent any nefarious actors from altering the motor oil or its packaging, allowing you to track motor oil through the entire supply chain.

Combating Fake Motor Oil with Blockchain

Fake motor oil can ruin a vehicle engine, drastically reducing its performance and ultimately making cars unsafe for driving. From the earlier facts, we see that blockchain can help to win back trust to the motor oil industry by reducing (and eventually eliminating) fake motor oil supplies across the globe. With blockchain-powered, end-to-end supply chain transparency, you get an authentic and reliable product.

Besides safety and security that will come with blockchain, oil manufacturers will gain more profits as they won’t have to compete with their cheaper counterfeit alternatives.