How to start a petrol filling station business in Nigeria

A filling station also known as petrol station or gas station is a place usually by the road side where fuel is sold for cars, motorbikes and for home use. Because of the  high number of cars in Nigeria and the bad state of electricity supply, Nigerians overwhelmingly depend on fuel bought from petrol station to meet their elector city and transportation need. This has made Filling station business one of the most lucrative business in Nigeria.

Nigeria, the giant of Africa is unarguably one of the biggest oil producing nations in the world with very large crude oil deposits around the entire South-South, South-East, and South-West regions of the nation, both tapped and untapped.

Every aspect of oil exudes much money. From exploration to mining and even to exportation and marketing crude oil and its refined products. Apart from being an oil-producing country, Nigeria is also regarded as one of the biggest consumers of oil products in Africa as crude oil is the mainstay of its energy demands with a little above 40 million litres of oil products said to be consumed on a daily basis.

This fact is further substantiated by the millions of cars and trucks on the Nigerian roads that run on PMS or AGO (petrol or diesel) every day. Asides this, the aviation fuel which aeroplanes, helicopters and jets rely on to propel themselves into flying is equally derived from crude oil.

 

The Filling Station Business is Lucrative

Most houses in Nigeria own minor power generating plants (generators) that are sometimes used all day to power their homes and stand in the place of electricity supply. It is no exaggeration that most of these millions of generators used in the country run on either petrol or diesel. The Industries, Businesses, Schools, Hospitals, Religious Institutions and in fact everything in Nigeria depends on power generated privately from petroleum products consuming sets. It is often joked, that even the electricity distributing agencies use petroleum products in their offices to run their day-to-day operations! That is how much crude oil is of important in Nigeria.

All of these oil products are dispensed and sold almost wholly through Petrol Filling Stations. It is, therefore, safe to say that laying one ’s hands on a petrol filling station of his own, to market all these products, is a quick way to becoming a millionaire in no time. The demands for oil-related products in Nigeria is quite on the high side, and suppliers seem to be insufficient to meet up with such demand. It is so serious that even the major oil marketers like Oando, Total, Mobil, Texaco, etc. are usually on the lookout for individuals who are intending marketers ,who have the needed funds and logistics that they can sponsor trade.

With the current price regime of crude oil products in Nigeria after the recent removal of fuel subsidy by the Federal government, the amount which goes into the purchase of petrol alone in a day is roughly 5.8 billion naira. This shows how lucrative and booming the business is in Nigeria. With these statistics in mind, it comes as no surprise that filling station owners make profits of not less than 5 million naira every other week irrespective of the location of their filling stations. Unlike other business endeavours, filling stations do not necessarily have to be in the metropolitan cities as the demand for oil products is nationwide. Although those in the urban areas might have slight financial advantages over those in the rural areas.

Steps to start a filling station business in Nigeria

Follow these steps to start a filling station business in Nigeria:

 

1. Make a Business Plan

It is important and imperative that one decides on the type of oil marketer he wants to be. This is because doing this at the very early stage is like mapping out a business plan which will contain various details and strategies to be employed by the intending marketer. In Nigeria today, there are two types of marketers; dependent and independent marketers.

The dependent marketers are those who hold the Franchise of a Major Oil Marketer to market under their name with such intending marketer’s own facility fully branded by them. It is important to be clear on what the merits/benefits are before agreeing to be one as that will help him/her make the right choices.

On the other hand, an independent marker is one who owns a Petrol Filling Station as his personal business under his own name. This person purchases petroleum products directly from the NNPC. From a neutral point of view, it is usually more beneficial to be a dependent marketer. However, an independent marketer enjoys his freedom and is free to make his own rules and policies.

 

2. Registration

As a petrol marketer, you will need to register your business with Corporate affairs and also with any association as your location might dictate.  Licensing is very essential. It is important to register and follow all professional practice.

 

3. Start the Construction

After deciding on the above, the next thing is to go ahead and construct the edifice to be used for the filling station. The first step here is to carry out a feasibility study as to the location of the filling station as it would help in the decision making process of the station. As well as serving as documentation for future purposes. It is equally advisable that the filling station is built close to a major road so motorists can gain easy access to the station. It would be of further advantage if the building is close to a motor park or major market or any monumental location, in order to attract more patronisers.

 

4. Placement of Tanks and more

Upon the completion of this, a land of not less than two plots are to be acquired by the marketer and it is upon the land that the underground storage tank would be sunk. The tanks would contain diesel, petrol and kerosene respectively. There are tanks of different measurements but it is advisable that a tank of 45,000 or 60,000 litres is sunk so the marketer an always purchase more fuel before one tanker delivery gets exhausted.

 

5. Hire Expert Engineers

The bulk of the construction work is to be done by the construction engineer but they usually consist of:

1. A Bungalow: This is where the mart, car wash and an office would be located. The size of the bungalow depends on the owners choice.
2. Oil Pumps: A standard filling station has about 6 oil pumps which are used to sell fuel to prospective buyers.
3. Canopy: the canopy is what serves as the roof for the oil pumps and it protects the station’s attendants as well as the oil pumps from the sun and rain.
4. Perimeter Fencing: A fuel station must have fences on at least three sides of the land where it sits. The fourth side is where the entrance in and out of the filling station would be.
5. Hard-core Concrete: It is known that a filling station would be frequented by many cars and vehicles for a long period of time. Thus, it becomes pertinent that the flooring is properly done in a bid to prevent any incident of damage to the floor or cars.
6. Standby Generator: Since power supply in Nigeria is epileptic, it is only expected that effort is made to secure a generator to power the electronic oil pumps.

6. Staffing

Once all of these are acquired, the only other thing left is the staff of the filling station and that’s up to the owner to appoint those he needs. Usually, the most popular staff needed here are attendants (two to each pump), a security guard, a supervisor, a cashier and a manager.