Guide On Opening A Petrol Filling Station Business In Nigeria

This article explains how you can start a petrol filling station in Nigeria. Runnin a filling station is a lucrative enterprise in Nigeria

Procedures To Open A Petrol Filling Station In Nigeria

Petrol filling station

Nigeria is among the largest oil producing country on the planet and they have deposits across the South South, South West and South East region of Nigeria which consists of both tapped and untapped. Beginning from the exploration to exportation and to the marketing of products, money is involved. Nigeria is among the largest consumers of oil products in Africa with up to 40 million liters consumed daily.

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There are millions of trucks and cars on major roads on Nigeria. Majority of the homes have operating generators that operate often and these run on diesel. Businesses, factories, hospitals, schools all depend on the private power generated from the consuming sets of petroleum products. There is dispensation of all these products through petrol filling stations. If you are able to lay your hands and manage these petrol stations, you will earn revenue. There is demand for oil related products which are very large and there are suppliers that are not enough.

Major marketers like Total, Mobile, Oando, Texaco and the rest are always for searching for individual marketers that have need for logistics and finance that can sponsor in this enterprise. Ensure that you get a good petrol filling station business plan before you start.
The average price for these refined produce are high and this gives a guarantee of more marketing profits for marketers.

If 40 million liters are daily consumed in Nigeria, the sum of 40000000 x 97 = N3880000000 are spent on a daily basis by Nigerians. Assuming that you buy a full tanker load of fuel that has a load capacity of N30000 litres and then there is complete selling which takes less than 6 days to sell ( this depends on the demand and your petrol filling station), the cash return that is expected for each of the product is shown below:

  • A diesel tanker= N4500000
  • A petrol tanker = N2910000
  • A kerosene tanker= N3900000
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Your profit return from marketing these products = N3200000. This means that in one week or otherwise when you sell all the profits, your profit is N3m. Since they are not yet done with the subsidy removal, the prices will have to increase as the months come. So how much does it cost to open a petrol station?

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This your petrol station does not have to be in a city like Abuja, Lagos, Port Harcourt and Enugu. You can have it located in the rural areas as these regions are often neglected by major sellers who are fond of urban areas. It is less expensive to build and maintain.

Choose Your Marketing Category

They are of 2 types which are dependent and independent marketers. You will have to comprehend this properly before making your choice. You can do both if you have an adequate capital to handle more than one station and you can take one as franchise and the other for marketing independently.
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The Definition Of The Dependent Oil Marketers

The dependent marketer is one who has the franchise of a main oil marketer to sell in their name using your facility that you branded to them. The advantages have to be clear to you to help you make appropriate decisions.

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Advantages Of Dependent Oil Marketers

1) Your business is set up off the brand of the Major Marketer. The main marketers are brands like Mobil, Texaco, Ap, Oando, Total etc.

2) You are at the back of your market and possess their customers and they continue to sell their brand while you go on with your business.

3) You do not need a representative or agent to stat at the depot since your main markets have done that.

4) You do not have to pay for products of petroleum by making use of bank draft, payment is made directly to their account.

5) Your products are directly delivered into your filling station and punctually by your major marketer since they already have the logistics.

6) You do not have to advertise.

7) You get the logistics support.

Disadvantages

1) You miss your brand and business name.

2) You miss the profit margin.

3) You are dependent on the terms and conditions and policies of your marketer which is not very good for your brand. You get regulated by their products and prices.

The Definition Of The Independent Marketers

This is an owner of a petrol filling station who operates his enterprise with his business name, purchase the products directly from NNPC and has an assistant representative and assistant at the Petroleum Products Marketing Company (PPMC) depot run by NNPC.

Advantages Of Independent Marketing

1) You operate your business with your business name and set up your logistics and brand.

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2) Lifting of products directly from depots of NNPC at smaller prices in which you earn a particular amount on every liter of petroleum products lifted and you can source products wherever you choose.

3) You operate directly with agencies and authorities and you run your business with your own terms and policy.

Disadvantages

1) The cost of the minimum quantity per product of petrol for a tanker of 30000 litre is 2 million naira.

2) You will have to use your own tanker for transporting products.

3) You have to do the advertising.

4) You will have to employ someone to pay for the products.

5) For every product you lift you pay the independent Petroleum Marketers Association of Nigeria (IPMAN) N5000 for insurance.

Setting Up Your Petrol Station

1) Do research and feasibility studies. Location should be along a major road and should be close to a busy area or high traffic area.

  • Land needed is 2 plots of land
  • Storage tank should be between 30000 to 450000 litres.
  • Construction involves engineers to handle that. They handle the petrol filling station design and construction
  • Other items are:
  • Capony over the pumps
  • Bungalow
  • Perimeter fencing
  • Flooring ( hard core)
  • Generators
  • Electronic pumps
  • The Staff For Your Petrol Filling Station

  • Security
  • Employ appropriate security.
  • Attendants of 2 for each pump will needed.
  • Employ a cashier to handle cash.
  • Employ a supervisor for your filling station.
  • Get a manager for the station.

Conclusion

Now you have seen how to start a petrol filling station in Nigeria, you can proceed with this if you have the capital. If you have any questions, feel free to make use of our comment box.

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The Author

Nwuzoh Ikechukwu Ernest

I am a writer and engineer. I am fond of tech, innovation and invention. Football is my hobby apart from writing.

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  1. How do I get a licence? How much do I have to pay to get it?

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