How to Start Lubricant Oil Business in Nigeria: Detailed Guide

lubricant oil
Photo by Daniel Andraski

If you are searching for a business that few people in Nigeria are aware of, such as an engine or lubricant oil business, it is a buy-and-sell business; you do not need to manufacture anything; you simply buy in bulk and sell it to consumers.

Its profitability is unquestionable; it is an undeniable fact that industry machinery, automobiles, and some large generators cannot function without engine oil; they all require it to function properly, which means engine oil is in great demand.

You will have little competition if you run this business, but you must situate your store or space near a street or traffic source because the engine oil business flourishes in high-traffic locations.

What is Lubricant Oil?

Lubricant oil is a viscous liquid that is used to lubricate the internal combustion engines of automobiles and industry. It is also known as motor oil or engine oil. It is made up of base oils and additives that preserve and increase performance. Lubricating oil is its scientific name. The distribution and supply of lubricating oil to various businesses is the focus of the engine oil supply business in Nigeria and Africa.

What is the Lubricant Oil Business

The engine oil company buys and resells lubricants such as motor engine oil, clutch and brake oil, automatic transmission oil/fluid, and diesel oil, as well as other associated items such as injector cleaner, oil treatments, and Greece.

This is an extremely profitable and simple company to establish, regardless of where you live in Nigeria. The profit margin is quite high because there is no predicted loss rate, and the products rarely spoil regardless of how long they stay in the shop.

There are many dimensions for the engine oil business operations in Nigeria, ranging from sales of already packaged oils to sales of the ones you’ll repackage yourself (e.g. sales of tiny quantities), and the start-up cost varies accordingly.

Investing in Different Lubricants

Do you want to invest in the engine oil and lubricants industry? Before we go into the requirements, let’s take a look at the items and the market.

#1. Motor Engine Oil

One of the most widely used lubricants. They are either 5W 30 or 5W 40, depending on the brand and treatment. Depending on the city, demand is high, and it can be difficult for suppliers to supply it; in other cities, however, it is highly competitive. In any event, everyone who uses a motor vehicle or other items must patronize you, whether as individuals or as mechanics.

Because automobile manufacturers usually need owners to service their vehicles on a consistent basis, they must change the engine oil when doing such services.

#2. Automatic Transmission Fluid

Most automobiles now have automatic transmissions. As a result, the need for automatic transmission oil continues to grow. The oil specification varies depending on the manufacturer: Dexron, Mercon, DW (ZF), and so on. This oil is changed based on the mileage specified by the manufacturer.

Although changing transmission oil is not as frequent as changing engine oil, the number of automobiles that come to the mechanic workshop is so large that if you are strategically positioned, you will obtain patronage on a daily basis.

#3. Clutch and Break Fluid

Brake and clutch fluid are frequently specified by the same manufacturer. For cars with manual transmissions, they usually appear as Dot 3 and 4. Individuals and mechanics, like the oil described above, have a strong demand for them.

#4. Diesel Engine Oil

Diesel engine oil, like gasoline engine oil, is in high demand. Also, Diesel engine oil is sometimes in higher demand than gasoline oil. This is because the engines that use it are not just motor cars, but also other heavy machinery employed in the manufacturing sector. Diesel engines are often specified as 15W 40. It is typically thicker due to the heat generated by the engine that uses it.

#5. Grease

Grease is a highly sought-after type of lubricant. Individuals, businesses, and mechanical engineers are constantly in need of it. It makes no difference whether an engine runs on gasoline or diesel; there is always a requirement to avoid rust, hence the demand for grease. SAE J310 is the most well-known specification for machine grease.

#6. Oil Treatments

This is not a lubricant, although it is frequently used by mechanical engineers and individuals after they have used engine oil, particularly gasoline engines. Oil treatment is said to help clean the engine and reduce heat generated otherwise. It is acceptable to include it in your inventory as you begin your lubricant business.

How Much To Start Engineer Oil Business in Nigeria?

The key question at the end of the day remains: how much do I need to start this engine oil business?

It all depends on your budget and if you want to accomplish it on a large or small scale. If you run a small-scale engine oil business in Nigeria, you may choose to eliminate some of the items listed above and concentrate on the most important ones.

A small-scale profitable engine oil business may require N200,000 to N400,000, whilst a large-scale business may require N400,000 or more.

How to Start Engine Oil Business in Nigeria

We’ve arrived! As I previously stated, beginning an engine oil business in Nigeria is extremely simple, as the need of various lubricants for various purposes is increasing on a daily basis.

The following is a step-by-step instruction on how to start an engine oil business in Nigeria with little capital.

#1. Start with Business Research/market survey

The first step in launching any firm is conducting market research to understand how the business operates. Your market study for the engine oil business in Nigeria should begin with the best-selling lubricants, profit margins, and business dos and don’ts.

Following that, you can conduct further in-depth research on the best time of year to begin in your area, as well as the ideal areas to locate your shop based on your town/village/area.

#2. Pick The Best Approach for You

One remarkable aspect of the engine oil business is that it can be established with very little capital as well as a large budget. As a result, your strategy for this business should be budget-driven.

If you have a capital of N50,000 or less, the best way to start a roadside engine oil business is to fill bottles or tiny gallons with drum oils and sell in small quantities.

With a larger budget of up to 300,000, N500,000, or more, opening a warehouse or shop and selling already packaged engine oils such as 1 litre, 4 litres, 5 litres, and 30 litres, as well as other lubricants, would be an excellent strategy.

#3. Choose a Good Location

In enterprises like this one, the location of your shop is more important because you can place it in a market square and expect the maximum sales.

In Nigeria, ideal locations for lubricant businesses include filling stations, mechanic shops, motor/trailer parks, and even highway roadsides.

Security is a key consideration when looking for a decent site for your business. Take your time looking for a place with no touts or hoodlums, as well as one with a low crime record.

#4. Find a Reliable Supplier

Finding a good supplier from whom you can buy at the lowest wholesale costs and possibly receive some discounts is a smart place to begin when looking for goods. This will benefit your marketing approach and boost sales.

There are numerous vendors in each state of Nigeria, so take your time reaching out to those in your state one by one and choosing the finest offer.

#5. Set Up Your Business Place (Shop/Kiosk)

Once you’ve identified and secured a suitable site as well as a reliable supplier, the following step is to rent a shop or obtain a container to begin with.

Adding some branding to your shop, such as names and perhaps a banner, could improve your marketing plan. So, make sure your shop is better than your competitors.

#6. Become a member of the best engine oil dealers association in your area.

There are various associations of engine oil vendors in practically every town in Nigeria. Joining one is good since it allows you to learn more about the business by bringing together like-minded vendors to discuss ideas.

Some of the advantages of joining an association include receiving current updates on what is going on in the engine oil market and, most crucially, obtaining your membership license so that no one harasses you after you begin.

#7. Create an Effective Marketing Strategy

Making is the most significant aspect of the engine oil business, just like it is in any other business, especially if you are in a competitive location.

Creating a decent marketing strategy, such as offering discounts, is an excellent marketing strategy for this type of organization. But you can come up with a better one!

#8. Register Your Company with CAC

Even for an engine oil business in Nigeria, registering your firm with the Cooperate Affairs Commission is a wise choice if you start with strong capital.

Scaling your business will be much easier with your CAC certificate because many suppliers would be ready to engage with a recognized and trusted business, especially when it comes to purchasing goods on credit.

Furthermore, once your company is registered, obtaining loans to rapidly scale it will be a breeze.

Market to Target for Sales

While beginning an engine oil business in Nigeria may be a simple procedure, knowing which demographics to target will help you achieve not only more sales but also more profits.

Here are some markets to get started in.

  • Mechanics
  • Drivers
  • Vehicle owners and users
  • Users of motorcycles and generators
  • Companies/industries
  • Engine oil distributors

These are some of the folks you should target in order to generate continuous revenue for your company.

Challenges of Oil Business in Nigeria

While there are many advantages to getting started in the lubricant oil industry in Nigeria, there are also some drawbacks to be aware of. They are as follows:

#1. Inconvenient location

If you read this post carefully, you will notice that I place a high value on traffic source location; if you make the error of setting up in a bad area, you will despise yourself, and only your family and friends will patronize you.

#2. Poor brand

If you know that a certain engine oil brand is terrible, don’t sell it because it will hurt the sales of other items.

#3. You have no say in the matter.

Because you are not the producer, you cannot precisely control how your product will look. It is also difficult to establish a unique selling proposition that will distinguish you from others.

#4. Competitiveness

You will almost certainly have competition if you do not thoroughly investigate that sector. It’s possible that the neighborhood is deplorable. The only solution is to locate your business near a gas station. You don’t need to be concerned if you’re just starting out as a wholesaler.

How Profitable is Engine Oil Business in Nigeria?

If you ask me about the profitability of the engine oil business in Nigeria, I’ll be honest. I would venture to say that it is one of the fastest-moving daily income enterprises in Nigeria that can be started with little capital.

Given the increasing need for it on a regular basis, you may make a nice living from this business, provided you understand it and know what you’re doing.

How Big is the Nigeria Lubricant Market?

The Nigeria Lubricants Market was valued at 503.50 million liters in 2021 and is expected to grow at a CAGR of 3.48% to 597.33 million liters in 2026.

Who Buys the Most Oil from Nigeria?

Nigeria’s primary Crude Petroleum export destinations are India ($8.11 billion), Spain ($5.38 billion), the United States ($2.84 billion), France ($2.55 billion), and South Africa ($2.17 billion). Between 2020 and 2021, the fastest-growing export markets for Nigerian crude petroleum were India ($2.9 billion), the United States ($1.65 billion), and Spain ($1.63 billion).

What is the Demand for Lubricant Oil?

The entire global demand for lubricants peaked in 2021, reaching 37.6 million metric tons. The global lubricant demand fell to 35.6 million metric tons in 2022.


If you want to start a business in Nigeria with as little as N50,000 and up, selling engine oil is a terrific option to consider, especially if you’re experienced with autos.

With this essay, I hope you’ve filled your mind with everything you need to start an engine oil business, as well as how to start an engine oil business in Nigeria with a small cash and make a lot of money.


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