How to Start a Gas Station Business in Nigeria (2023)

gas station
Photo by Erik Mclean

Do you want to open a gas station business in Nigeria? If so, read on, because this article will give you all the information you need to get started. The gas filling station business is one of the most profitable in Nigeria; it has a high turnover rate when compared to other businesses and also requires a large capital to start.

Many people, particularly those living in cities, have begun to use gas as a result of civilization. Aside from that, the rising cost of kerosene and the health risks associated with firewood have prompted many people to switch to cooking gas. In this article, we’ll outline how profitable a gas station business is, how much capital is needed, how to start a gas station business, as well as the business risks associated with a gas station business.

What is a Gas Station Business?

A gas station business is a business that sells automotive fuels such as gasoline and diesel, as well as automotive parts and services (such as car washes) and other non-automotive goods and services. Many gas stations also share space with convenience stores to increase foot traffic.

Is Gas Station Business Profitable?

The Nigerian gas station industry is lucrative for obvious reasons. The fact that gas is the most commonly used cooking fuel today is a fundamental factor in why it is a successful business. It is hygienic and clean. And as is common knowledge, highly profitable products typically enjoy strong demand.

The lack of readily available micro gas plants in several Nigerian states is another factor that makes the roadside gas station business successful. Many Nigerians are now entering the retail sale of cooking gas as a result of the strict controls placed on these enterprises. Due to their ability to open shops in any neighbourhood or location and the fact that customers prefer them to distant gas plants, this boosts their profitability.

Finally, the Nigerian gas station industry is successful due to the availability of additional products you can market and sell to supplement your income. You can sell gas cylinders, gas stoves, hoses, and other gas cooking equipment as a retailer of gas. Additionally, you can earn money by fixing gas cylinders for consumers.

How Much Money Do You Need in Nigeria to Start a Gas Station Business?

What is the cost of starting a tiny gas station in Nigeria? is the most frequently asked question by those intending to launch a cooking gas business in Nigeria? or What is the starting price for a gas company in Nigeria?

What kind and how much of a gas business you wish to create will determine the answer to this query. With N100,000, you can begin a small gas station business in Nigeria. Here, you’ll need to rent a gas cylinder (bottle) for a low cost from a distributor, fill it with gas, and then sell it to end users for a retail price.

You can establish a gas station business anywhere between 8 naira million and 15 naira million with more money and on a greater scale. You’ll need to construct a snazzy gas station in this location and offer both retail and wholesale pricing.

How to Launch a Gas Station Business in Nigeria

With careful planning and execution, you can launch a successful gas station business in Nigeria. To do that, there are a few key steps to follow. They include

#1. Start With a Proper Market Survey

Doing proper market research is critical for any business you want to start. This will teach you more about the business, including how it operates and what to do and what not to do. Take your time to conduct a thorough market survey by approaching gas sellers in your area, establishing a business rapport, and learning how to start a business in your area from them.

They will educate you on the business, when to start, where to start, marketing strategies, pricing, and, most importantly, how to register your business so that you are not bothered by anyone after you start. Also, if there are gas seller associations in your area, conducting market research will help you determine who is the best.

#2. Acquire the Necessary Permits and Licences

To operate a gas station, you will need to obtain several permits and licenses from the federal, state, and local governments. The specific permits and licenses you need will vary depending on the location of your station. However, some common permits and licenses include a business license, a zoning permit, a fire safety permit, a health department permit and a fuel storage tank permit.

#3. Secure the Capital You Need

The next step after developing your business plan for the gas station is to secure the funding needed to launch the enterprise. The type of cooking gas business you want to launch will determine how much funding you require, as I previously stated. If you plan to start a retail cooking gas refill business, you will use your funds to purchase various pieces of startup equipment.

#4. Acquire Gas Station Skills

You must understand how to refill gas if the type of gas business you intend to start is modest. Yes, a lot of people are unaware that the gas industry involves some handwork. You can find someone in your region who is in the company and apply there as an apprentice to learn how to refill gas cylinders. This could be free or expensive. You could be ready to launch your own gas station business after learning for one to three months.

#5. Establish a Business Location or Shop

You require a location where you can sell gas cylinders to your clients and refill gas. For your cooking gas business, renting a shop is important. You should take a few factors into account before renting a space for your cooking gas business.

If you strictly adhere to these simple guidelines, you shouldn’t have any trouble quickly raising company profitability.

  • You must ensure that the rent for your shop is reasonable. No more than 30 per cent of your first investment should be used for shop rent. To avoid overspending, consider looking for a store with a reasonable rent.
  • Verify if the shop you are renting is situated in a busy or populous neighborhood. This location can be near a well-known bus stop or close to a busy street. This is to make sure that it’s simple for people to find you and use your services.
  • You should confirm that the store you are renting is different from other stores. This is to ensure that, should a fire outbreak occur, you can put it out.

#6. Start Adding Gas to the Tank

The next stage for you is to start refuelling gas for your customers after renting your business and purchasing your gas equipment. Customers will start approaching you and inquiring about your gas prices in kilograms, or KG. Make sure your prices are accurate to avoid unneeded losses. You must be aware of the price at which your gas will be sold in 3kg, 4kg, 5kg, 7kg, 12kg, and more.

#7. Gas Station Business Profits

You can profit from the gas station industry in Nigeria in a variety of ways. You can earn money by selling gas cylinders, selling gas equipment, filling gas tanks for consumers who need gas, and repairing gas cylinders and gas stoves. Your business’s profits are diversified with these several revenue streams.

What You Need to Get Started with a Cooking Gas Business

The whole list of tools required to launch a profitable gas business in Nigeria is as follows.

  • (Cylinder/Bottle) gas tank
  • Scale Dispenser/Pump
  • Verve screw for a hosepipe
  • mechanical tool sets
  • Extinguisher for fire

Challenges Of The Gas Station Business in Nigeria

Despite how profitable a gas station business is, there are a lot of challenges gas station business owners face in the business and if careful decisions are not made, it may lead to setbacks. Some of these challenges include:

#1. Unreliable Gas Supply

Gas station businesses in Nigeria face inconsistencies in gas supply from refineries and gas plants. This can result in a shortage of cooking gas on the market, lowering the company’s profitability.

#2. Expensive Acquisition and Maintenance of Equipment

The purchase of equipment such as storage tanks, cylinders, and regulators is required when starting a gas station business. These pieces of equipment can be costly to acquire and maintain, resulting in high operational costs for the company.

#3. Transportation Issues

Due to poor road infrastructure and traffic congestion in some areas, moving cooking gas from storage facilities to retail outlets can be difficult. This can lead to delays and higher transportation costs.

#4. Concerns about Safety

Handling and storing gas can be dangerous, and businesses must follow strict safety guidelines to avoid accidents or explosions. This necessitates additional training and the purchase of safety equipment.

#5. Competition

The gas industry is highly competitive, with numerous players vying for customers. This can make it difficult for new businesses to establish themselves and remain profitable.

#6. Government Regulations

The gas industry is governed by government agencies, which have the authority to impose stringent requirements on businesses. These regulations may raise operational costs and cause delays in obtaining required permits.

The Business Risks Associated with Gas Station Business

Every business faces unique challenges, and the main danger in the gas industry is fire explosions, which happen frequently because liquified natural gas is so highly flammable. However, it isn’t much of a problem because it can be readily reduced or even avoided.

You must constantly be on the lookout for leaks in those cylinders if you want to stop this from happening, as leaks are one of the main causes of fire and explosion. Additionally, you should purchase a reliable fire extinguisher that will come in handy when a little fire starts.  

The risk of government regulation in the industry is another. Some users might find it difficult to accept a price hike for LPG today, forcing them to switch back to using kerosene or firewood. Your sales will decrease if that occurs and you will lose some clients.

What Makes the Most Money For Gas Stations?

Station owners make most of their profits in their stores on sales of food and drinks, as well as alcohol where sales are legal.

How Much Money Does a Gas Station in Nigeria Make per day?

The Petroleum Products Pricing Regulatory Agency (PRA) estimates that every litre of gasoline delivered to end users generates a profit of N4. 60 for fuel stations nationwide. The sales of gasoline generate a daily profit of about N184 million.

With 50,000 Naira can I start a Gas Business?

Despite the periodic price increases for cooking gas, starting a profitable business in Nigeria with only N50,000 is still possible. However, there won’t be much of your 50K capital left after purchasing scales, hose pipes, dispensers, and other necessary items due to your limited budget.

Where Would be The Ideal Location for a Gas Station?

High traffic counts, consumer accessibility, and visibility from oncoming vehicles are all characteristics of a superb position. To put it another way, every owner ought to search for this at a gas station. It is crucial to guarantee that customers can easily access and exit the gas station.

How Can I Create a Budget For Gas?

Divide the miles-per-gallon (MPG) value by the distance you need to go. For instance, if your car only gets 25 mpg and you need to drive 200 miles per week, you will need to purchase about 8 gallons of fuel each week. To determine your weekly fuel expenses, multiply this number by the average gallon price.


The gas station industry is worthwhile, given the constant rise in cooking usage and the regular price increases. With the help of this article, I hope you now have a better understanding of the Nigerian cooking gas industry, including how it operates, what to do and what to avoid, and most importantly, how to launch a profitable gas company in Nigeria on a shoestring budget.


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