Why Q&Q Is the #1 Reason Fuel Deals Collapse After SGS
Quality, Quantity & Title Transfer explained simply — and why most buyers misunderstand all three.
Introduction — SGS Is Not the Finish Line
Many buyers believe that once SGS issues a report, the deal is secured.
In reality, most fuel transactions collapse after SGS — not before.
The reason is almost always the same:
Q&Q failure.
Quality, Quantity, and Title Transfer are legally linked. If one fails, the entire transaction fails.
1. What Q&Q Really Means in Fuel Trading
Q&Q stands for:
- Quality — Does the fuel meet contract specifications?
- Quantity — Is the delivered volume correct?
- Title Transfer — Has legal ownership passed?
These three elements are inseparable.
SGS can confirm quality and quantity — but SGS does not transfer title.
2. Quality: Why “Within Specs” Is Not Enough
Quality refers to compliance with the agreed standard:
- EN590 for diesel
- Jet A-1 for aviation fuel
- ISO standards for other products
Common quality failures:
- Out-of-range density or sulfur
- Water contamination
- Additive mismatch
- Wrong sampling point
If sampling is not done according to contract terms, the report can be challenged — even if results look acceptable.
3. Quantity: Where Most Disputes Begin
Quantity disputes arise when:
- Shore tank readings differ from vessel readings
- Temperature correction is misapplied
- Meter calibration is outdated
A small percentage difference on large volumes can mean millions in dispute.
SGS measures — but the contract decides which measurement counts.
4. Title Transfer: The Most Misunderstood Element
Title transfer is not physical.
It is legal.
Title passes only when:
- Contractual conditions are met
- Payment terms are satisfied
- Transfer point is reached (TTT, TTV, CIF, etc.)
SGS confirming fuel does not mean you own it.
Many buyers fail because they assume:
“SGS passed, so the fuel is mine.”
That assumption collapses deals.
5. How Q&Q Fails in Real Transactions
Typical failure scenarios:
- Quality passes but title conditions are unmet
- Quantity dispute triggers payment hold
- Payment delay voids title transfer
- Inspection timing violates SPA clauses
Q&Q is not sequential — it is conditional.
6. Why Buyers Misinterpret SGS Reports
SGS reports:
- Are factual, not contractual
- Do not override SPA terms
- Do not assign ownership
Buyers who rely solely on SGS without reading the SPA fail systematically.
7. How Sellers Use Q&Q Clauses to Protect Themselves
Sellers structure Q&Q clauses to:
- Limit exposure
- Define acceptance points
- Control title transfer timing
If buyers do not understand these clauses, they sign away leverage unknowingly.
8. How to Structure Q&Q Correctly as a Buyer
Buyers should ensure:
- Clear inspection location
- Defined measurement method
- Unambiguous title transfer point
- Aligned payment trigger
When Q&Q is aligned, SGS becomes confirmation — not conflict.
FAQ — Q&Q Explained
- Does SGS control title transfer?
No. Title is purely contractual. - Can quality pass and deal still fail?
Yes — due to quantity or title issues. - Who decides quantity?
The contract, not the inspector. - Is SGS mandatory?
Often yes, but terms vary. - What causes most post-SGS failures?
Misaligned Q&Q clauses.
Conclusion — Q&Q Is the Deal, Not the Report
Quality, Quantity, and Title Transfer are not checkboxes.
They are the legal spine of the transaction.
SGS confirms facts — contracts decide outcomes.
If Q&Q is misunderstood, SGS only confirms why the deal collapses.
