This article will set out to discuss about petrol station or filling Station business in Nigeria.
Nigeria is one of the world major crude oil producers and it is one of the most populous countries in the world.
Energy use in Nigeria is very high for many reasons.
Despite the high number of filling stations or petrol stations in Nigeria, many Nigerians still travel far kilometers to get to filling station to refill or purchase energy products.
This shows that more investors are still needed in filling station business in Nigeria.
In this post, we will be talking about filling station business in Nigeria.
Our major focus will be requirements for opening or starting filling station business in Nigeria.
Also, we will be discussing how lucrative or profitable filling station business is in Nigeria.
We will not be leaving out how much can be used to start a fillings station in Nigeria.
All these and more information about starting a petrol or filling station in Nigeria will be discussed in this blog post.
How To Start / Open Filling Station in Nigeria
Starting and owning a filling station in Nigeria is open to all citizens and legal immigrants living in Nigeria.
Opening a filling Station business in Nigeria is considered just like every other businesses in Nigeria.
It is open to every citizen and persons living and willing to do business in Nigeria provided they acquire all the required permits.
To start or open a filling station business in Nigeria, investor will have to apply for a permit and license with Department of Petroleum Resources (DPR).
This is a federal government agency responsible for regulation of business of dealing on petroleum products in any part of Nigeria.
The DPR has a set down rules on how to setup and operate a filling station, that may sell any of the following etroleum products; Premium Motor Spirit (PMS) popularly known as petrol; Dual Purpose Kerosene (DPK), popularly known as kerosene as well as Automated Gas Oil (AGO), popularly known as Diesel.
So, to open a filling Station, an application must be sent to DPR seeking for approval and licensing.
This will be followed up by the government agency and if investor meets the requirements for opening filling station in Nigeria, they will be licensed.
The DPR requirements for opening a filling station in Nigeria can be obtained at any DPR office across the federation or state.
Also, approval will also be sought from the relevant state government agency, in some state it is handled by ministry of housing and planning.
It is one of the requirements for opening and operating a filling station in Nigeria.
Another very important requirements for opening and running a filling Station in Nigeria is that the owner must register with Independent Petrol Marketers Association (IPMAN).
All these are the major requirements for starting and opening a filling stations in Nigeria.
How Much Can Be Used to Build Filling Station in Nigeria
The cost and amount required for building filling station in Nigeria is relative.
There are different standard of filling stations in Nigeria,as such the standard determines how much that building filling station in Nigeria can cost.
However, according to numerous publication, it costs between N20 million to N75 million to build a filling station in Nigeria.
The standard and facilities in the filling Station determines how much that can be spent in building the filling station.
It will cost around N70 million to build a standard filling station in Nigeria.
Some of the facilities that cost significant amount in building filling station in Nigeria includes:
- Underground Storage Tanks
- Casting of Surface
- Administrative Building
- Dispensing Machines
These are some of the major logistics that require high cost when building a filling station in Nigeria.
How Profitable & Lucrative is Filling Station Business in Nigeria
Filling station business in Nigeria is highly lucrative and profitable.
According to NNPC, Nigeria federal government owned oil company, Nigeria’s daily petrol consumption is between 35 million – 40 million liters of petrol.
Petroleum Products Pricing Regulatory Agency another top government agency in petrol product marketing and sales noted that approximately N5 profit is made from each liter of petrol sold to a consumer.
So, multiple this profit figure with the daily petrol consumption in Nigeria it shows that around N190 million profit is made daily by all filling stations in Nigeria.
The above calculations is on PMS only, diesel and kerosene are not included.
So, with the above data, it is very obvious that filling station business in Nigeria is highly profitable and lucrative.
Also, it shows that opening a filling station in Nigeria, though expensive, is very good investment in Nigeria.
These information has also shown that filling station is one of the few businesses in Nigeria with high profits and Return on investment (ROI).
However, locations with potentials should be considered when siting a filling station in Nigeria for high sales and patronage.