How profitable is the Nigerian filling station business? This could be the question you’re thinking about right now! Nigeria, in addition to being an oil-producing country, is also one of Africa’s largest consumers of oil-based commodities, with an estimated daily consumption of 40 million liters.
In today’s essay, we’ll look at how to start a filling station business in Nigeria. So stick with us to the end to learn how to start and profit from a filling station business in Nigeria.
What is a Petrol Filling Station?
A fuel filling station, often known as a gas station, is a facility where petrol or gasoline is sold to motor vehicle drivers. The scientific name for gasoline is benzene. Petrol filling stations often sell a variety of fuels, including gasoline, diesel, and compressed natural gas.
Is The Filling Station Business Lucrative?
Most Nigerian homes have small power-generating plants (generators) that are sometimes utilized all day to power their homes and stand in for the power grid. It is not an exaggeration to say that the majority of the country’s millions of generators run on either gasoline or diesel. Industries, businesses, schools, hospitals, religious institutions, and everything else in Nigeria rely on power generated privately from petroleum product consumption sets. It is frequently joked that even power distribution companies use petroleum products in their offices to run their day-to-day operations! That is how crucial crude oil is in Nigeria.
All of these oil products are virtually entirely distributed and sold through petroleum filling stations. It is, therefore, safe to argue that acquiring one’s own gas-filling station to market all of these things is a rapid path to becoming a billionaire. In Nigeria, demand for oil-related items is relatively strong, and supplies appear to be insufficient to meet such demand. It is so severe that even large oil marketers like Oando, Total, Mobil, Texaco, and others are always on the lookout for people who are intending marketers and have the necessary cash and logistics to sponsor trade.
With the current price regime of crude oil products in Nigeria following the recent withdrawal of fuel subsidies by the federal government, the amount spent on petrol alone in a day is approximately 5.8 billion naira. This demonstrates how profitable and thriving Nigerian business is. With these facts in mind, it is no surprise that filling station owners make at least 5 million naira every other week, regardless of where their filling stations are located.
Because demand for oil goods is widespread, filling stations, unlike other business endeavors, do not necessarily need to be located in major cities. However, those living in cities may have a minor financial advantage over those living in rural areas.
Different Types of Petroleum Marketers in Nigeria
In Nigeria, there are two sorts of petroleum marketers. They are as follows:
#1. Dependent Marketers
Petroleum marketers that possess the franchise of a big oil marketer are known as dependent marketers. Dependent marketers may use the name to sell petroleum products to the general public under the terms of this franchise. To begin a franchise business with a well-known filling station in Nigeria, you must first grasp the pros and cons of this sort of business.
#2. Independent Marketers
These are petroleum marketers who own and operate a filling station under their own name. This could be a family name or a name that is unique to them. You can buy petroleum products directly from the Nigerian National Petroleum Corporation (NNPC) as an independent marketer. According to appearances, becoming an independent marketer has more advantages than becoming a dependent marketer.
Steps to Start a Filling Station Business in Nigeria
Here’s how to start a filling station business in Nigeria, step by step.
#1. Develop a Business Plan
Conducting a market survey and writing a business strategy are the initial steps in beginning a filling station business in Nigeria. Because opening a filling station requires a significant investment, you will need a business plan to guide you through the process.
This business plan will ensure that you do not overlook any steps in the construction of your filling station. The business plan will work out the capital required, help you through the basic prerequisites for getting started, and inform you on how to earn money within the first few months of operation.
Here’s our approach to creating a business plan in Nigeria. If you want us to write it for you, please contact us at contact@businessyield.com.
#2. Register your Company Name
The second stage in establishing a filling station in Nigeria is to obtain a business license. It is also critical to register your business name with the appropriate government agency. You must complete a few registrations with the Department of Petroleum Resources (DPR).
Aside from that, you’ll need to register your business name with the Corporate Affairs Commission (CAC). In Nigeria, especially for a business like this, registering under CAC is critical.
To complete all of these registrations, you must first decide on a name for your business and a location. After registering with the CAC, you will be given a tax identification number. When you actually establish your business, you will need your tax ID to pay your taxes.
#3. Construct your Filling Station
There are standards that must be followed in order to create a filling station, according to DPR Nigeria. You must adhere to these instructions. You must ensure that your filling station is not in a residential neighbourhood and faces a major route.
Are you offering only petroleum items, such as fuel, or do you sell everything? If you are selling, you must account for it. Obtaining two parcels of land will be ideal for this. You will also require the necessary equipment. Meters, lights, generators, and other devices.
#4. Construct Underground Fuel Tankers
When petroleum products are purchased and delivered by tankers, they must be kept somewhere. This is where the underground construction of tankers comes into play. Because petroleum products are deemed safe underground, all stations store them there.
Separate tanks will be required for petrol, diesel, and fuel. These three tanks will be placed underground in various locations. A 60,000-gallon tank is ideal for fuel because it is in high demand. Using such a tank for underground fuel storage ensures that you can refill it before the tank runs dry.
#5. Hire Construction Engineers
The construction of your filling station will be handled by various engineers. They will be in charge of building your station. He will construct the cottage, which will be utilized for car washing, wheel balancing, a shop, and the manager’s office.
The size of this bungalow is determined by the desired land size. We also have engineers who will be in charge of the fuel pumps. 4 to 6 fuel pumps are required for a medium-sized filling station. You will require the services of an electrician for lightning, as well as security services for wired fencing and CCTV. All of this must be taken into account.
#6. Hire your Attendant and other Staff
At this point, you must hire all of the necessary personnel, including gas attendants, car washers, a manager, and others. According to the information I obtained, most filling stations hire Ordinary National Diploma (OND) and BSc graduates as gasoline attendants and master’s degree holders as managers.
However, how you hire your attendants is up to you and what you can afford. You will need to engage professionals to inspect your pumps on a regular basis to ensure that they are distributed appropriately.
Staff Requirement For a Filling Station Business
When it comes to the crew for this filling station business, the following are some mandatory people you should consider hiring:
#1. Safety
This is in my major staffing arrangements as a result of the high-security risk in the business of having an oil station due to the inflow of money.
As you and I are well aware, security in this country is a shambles. Until the cashless policy is fully operational and accepted by all, security will remain a top priority in this business.
Armed robbers prefer to strike late at night and at the end of the week when they can meet a large sum of money. Plan to combat them on all fronts, hire private security guards, and pay them well.
Make certain that you would not leave a large sum of money inside your oil station at any time, with or without security.
#2. Gas station attendants
You’ll need two gasoline attendants for each pump, and they’ll go between them one at a time. Multiply it by the number of pumps you intend to have; this is the number of gasoline attendants you will need.
#3. Clerk
This person will be in charge of managing money and keeping records of money received and dispensed. Use an account and practical productivity software to keep an accurate record of your financial developments.
#4. Administrator
His responsibility is to ensure that everything in the office and the personnel are in order. He ensures that everyone is doing their job and reports back to you or the director.
This guy must be incredibly dependable and skilled at what he does, and he must not be a trade-off person.
#5. Supervisor
He is the primary person responsible for the overall capacity of the oil filling station business and should be directly or indirectly involved in the oil business. Every other employee reports to him, and he is accountable to you. Choose this person carefully; he can make or break your business. I’ve seen administrators destroy enterprises.
Capital Needed to Start Filling Station Business
Investing as an entrepreneur in a filling station business in Nigeria can be capital-intensive, as the money required might range into millions of naira. The necessity of launching the business is what makes it a capital-intensive business. These standards from the Department of Petroleum Resources (DPR) must be met before one may completely enter the business; otherwise, the business will be shut down even before it begins.
Among these requirements are the location and land utilized for the petrol station, the tank, the quantity of fuel pumps, and so on. As a result, you’ll need between N50,000,000 and N90,000,000 to get started. If you lack this cash, it is acceptable to form a partnership or a limited liability company with people who share your beliefs.
How Much Does It Cost to Open a Filling Station in Nigeria?
To construct a standard filling station on any busy Nigerian road. You must set aside at least N100 million.
What is a Synonym for Filling Station?
Filling Station Synonymsgasoline station. A gas station. A gas station.
How Much Does It Cost to Buy a Petrol Station in Nigeria?
In Lagos, the average price of a filling station for sale is N900,000,000. The most costly filling station is worth N52,000,000,000, while the least expensive is worth N41,900,000. In Lagos, Nigeria, there are 117 available filling stations for sale.
How Do I Become a Petrol Attendant?
Petrol pump attendants are trained on the job. Initially, trainees will execute simple activities such as cleaning the station, serving gasoline, and wiping windshields.
How Do You Manage a Petrol Station?
Inventory management, pricing strategies, maintenance, customer service, technology integration, marketing, and environmental responsibility are all part of effective gas station and petrol station management.
Conclusion
Your filling station company must not be located in a city like Lagos, Abuja, Enugu, Port Harcourt, and so on. It can be located anywhere in the country, particularly in rural areas, which are sometimes overlooked by real marketers who prefer urban areas.
Having your Petrol Filling Station business in rural locations is significantly more economical to set up and maintain while ensuring economic benefit.
Please let us know if you require a comprehensive business plan. Alternatively, if you want us to assist you in establishing this business, please contact us.
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