Kerosene retail/supply business in Nigeria is one area that most people haven’t tapped to reap its benefits. If you must know, starting a kerosene business is very lucrative as the product is always on demand and used by most people, most especially, here in Nigeria.
So, If you are interested in starting a kerosene supply business, this post is for you as we have highlighted the profitable reasons for you to start, the challenges and how to start kerosene supply business here in Nigeria.
How To Start Kerosene Supply Business in Nigeria
To start a kerosene business, you are expected to have enough capital to purchase trucks, tankers e.t.c but If you do not have the required capital to purchase these, you can at least, lease a truck.
Also meet an expert in the oil and gas sector or a consultant in the field for advice before you sign any lease agreement.
You would need some licenses to operate. You would need to register under NUPENG (National Union of Petroleum and Gas Workers) with your tax clearance documents, VAT certificate, certificate of incorporation and a sponsor. You would also need to obtain the DPR Peddler’s permit and register under the Kerosene Peddler’s Union. The sole purpose of all these registration is to avoid necessary problems or your truck being impounded.
After the necessary registrations, proceed to the depots with your truck and money where the product is available and lift your product. You can either choose to lift products from the NNPC terminals, PPMC terminals or from independent marketers. Areas in Lagos where you can find most of the independent marketers depot are situated at Apapa, Tincan island and Coconut.
You can now set up a mini depot and supply kerosene to retailers or consumers as the case may be.
Note that in kerosene business, profit is based on volume and supply. Your target should be to lift and supply at least three truckloads of kerosene in a week or even more.
How to start a profitable Kerosene business in Nigeria, current cost and price of kerosene in Nigeria, things you must note if you want to start this business successfully is what this write-up is all about.
The current price of kerosene in Nigeria this 2020 is N190 thanks to our ever declining economy. Although, these prices are expensive, especially for a litre, most people still make cool money from engaging in kerosene selling business.
Kerosene also known as paraffin or lamp oil is a combustible hydro carbon liquid which is derived from petroleum. It is widely used as fuel in the industry as well as in households across the world. This post will show you how to get started in the business of selling kerosene. It is actually profitable if you do your due diligent well.
Steps on How To Start Selling Kerosene Business in Nigeria Today (2020)
1. Draw A Plan
You need a plan to start this business. You can’t set it up in an area in an area where gas cookers is mostly used. Setting it in a place with a lot of sellers existing also set you up for competition which you have to devise a means to tackle. You need to decide the number of litres you want to start with. Do your feasibility study and put your plan in form of a business (written).
2. Get A Location, Container, Measuring Unit And Sales Person
For you to succeed in this business, you need to set it up where it demand is very high. After getting such location, get yourself a kerosene tanker or container where you will store your kerosene for sale. You can either buy an already made one or get someone to fabricate yours for you according to your taste. After this, you need a form of measuring unit in order to sell your product. Find the acceptable unit of measurement in your location and stick to it.
The next entity you need is a salesperson since you might not always be available. However, make sure the person is cook at book keeping or you teach him/her how to keep record of all transactions so you will know where your kerosene business is heading to.
If you are starting out with less than 10,000 litres of Kerosene, you are not expected to own a license but anything above that you a license to operate.
Develop and stick to your marketing strategies. However, you need to keep tweaking it against the strategies of your competitors and the latest trend in the oil and gas market.
Benefits of Starting Kerosene Supply business in Nigeria
- In Nigeria and other African countries that lacks stable electric power supply, the demand for Kerosene product is very high as people in Nigeria depends on kerosene for cooking.
- With the large population in Nigeria made up of low income earners as majority, Kerosene is something they can’t do without as it is a source of energy to all who can’t afford other expensive forms of energy
- Lastly, the profit or gain in starting kerosene business is massive, but varies according to the market forces (demand and supply).
Factors to Consider in Starting Kerosene Supply Business in Nigeria
These factors are the normal day to day factors that affect either sales, profit and quality in any business you would want to start up and they should be taking into consideration if you are to succeed in your businesses
2. Be sure to register with the appropriate agencies to avoid your trucks being impounded.
3. Construct a long lasting surface tank
4. Arrange with good suppliers
5. Kick-start your business
Challenges of Starting Kerosene Supply Business
- You would need enough capital to start kerosene supply and retailing business, making it an expensive venture to start.
- Getting your licenses, permit in a country like Nigeria is extremely difficult unless you have someone in the system.
- Prices of the commodity can change at any point in time, so you must be ready to adjust especially when you are not getting regular supply from loading at the terminals or depots.