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Requirements And Cost Of Starting A Petrol Filling Station In Nigeria
Investing in a petrol filling station in Nigeria offers a promising and financially rewarding business venture. The opportunity to earn significant profits is particularly lucrative within the Nigerian market.
Studies have revealed that Nigeria currently has over 20,000 filling stations, however, the demand for more is still present. The oil and gas sector in Nigeria is the fastest-growing and highly competitive industry, constantly expanding each day.
To put it accurately, Nigeria is one of the countries that produces oil globally and is indisputably the largest consumer of oil worldwide.
Petrol and diesel are necessary for various establishments like homes, offices, hotels, hospitals, factories, industries, schools, churches, etc. Due to this demand, the business of supplying these fuels is highly lucrative, requiring a significant initial investment yet offering a high Return on Investment (ROI).
In Nigeria, there are certain criteria that need to be met in order to successfully start a petrol filling station. These requirements include seven key factors that must be taken into consideration.
Requirements for Starting A Petrol Filling Station In Nigeria
1. Business Plan
It is essential to conduct research on the business structure, operations, and marketing strategies of this venture. Utilize the information acquired through research to outline a detailed business plan.
2. Site & Property
Make certain that the chosen location is situated in a bustling area where cars, motorcycles, and people frequently pass through. This will facilitate attracting customers and consumers. Also, ensure that the property has ample space for building structures and parking lots for vehicles.
Seek the assistance of an engineer who will oversee the building venture. The structure will encompass either a single-story house or a multi-unit dwelling, a roof over the fuel pumps, a surrounding fence, durable flooring, and a stand for the pumps.
4. Acquire the Necessary Equipment
The subsequent action is to buy the necessary equipment for a petrol station, including items like a backup generator, fuel dispensers and pumps, an automated tank gauge, submersible turbine pumps, forecourt control, leasing options, spare parts, and more.
5. Register your Business
It’s crucial that you obtain a license for your business. Registering your business is essential for any significant investment to prevent potential issues and discomfort in the future. You will be required to register under the below bodies
- DPR – Department of Petroleum Resources
- PPPRA – Petroleum Products Price Regulatory Agency
- PPMC – Pipelines and Products Marketing Company
- NNPC – Nigerian National Petroleum Corporation
- IPMAN – Independent Petroleum Marketers Association of Nigeria
- NUPENG – National Union of Petroleum and Gas Workers
6. Hire personnel
It is necessary to employ various types of staff including secretaries, security personnel, attendants, cashiers, supervisors, managers, and others.
Promotion which is popularly known as “Promo” is One way to promote your gas station is by increasing awareness through the distribution of complimentary or free fuel, and it is also important to explore advertising options both online and offline.
Cost Of Starting A Petrol Filling Station In Nigeria
This paragraph will provide information about the amount of money required to establish a petrol station in Nigeria.
- The cost of land for a petrol station should vary between N2.5 million and N11 million.
- Construction falls under this category and includes contract engineers, laborers, carpenters, and house builders. The total expense for this sector is expected to be N35 million.
- Machines and equipment: The cost of necessary tools and equipment should amount to approximately 9 million naira.
- The cost of registering a business in Nigeria varies between N15,000 and N150,000, depending on the scale of the business.
- The cost for transportation and logistics should amount to one million Naira.
Business plan for a petroleum filling station in Nigeria.
A Petrol Filling Station Business necessitates a well-crafted plan. It is impossible to venture into the petrol business without a detailed business plan specifically designed for a petrol filling station. This plan serves as a robust framework to build your business upon.
Click here to learn how to generate a good business plan
Having a business plan for a petrol station when launching a petrol business has numerous benefits. It enables you to outshine your competitors and achieve success with minimal difficulty. It is strongly recommended to have a business plan in order to thrive in the petrol filling station industry.
Also, to achieve success in this business sector, it is essential to have a well-designed and up-to-date business plan. This plan serves as a comprehensive blueprint that will efficiently guide you towards achieving success in every aspect of the petroleum industry.
Above all, you must obtain a business plan from someone who possesses the necessary expertise. You may search online for business plan as reference for yours.
To establish a petrol business in Nigeria, you would need to have roughly 50 million Naira. It is important to bear in mind that the cost may vary, either lower or higher, depending on the scale at which you intend to operate the business.
The business of owning a petrol filling station in Nigeria is highly lucrative and worth considering.