One area of business in Nigeria people are not very much aware of its benefit is Kerosene supply business.
As we all know, Kerosene is always on demand because of its importance at home as fuel for cooking and for other purposes.
So you now know that starting a Kerosene business is very lucrative since the product is used on daily basis, more especially in Nigeria.
In this post we have highlighted the beneficial reasons for you to engage in this business, the challenges involved and how to begin a Kerosene supply business in Nigeria.
So if you are interested in starting a Kerosene supply business, keep reading to find out more tips about this business.
Guidelines on how to start a kerosene supply business in Nigeria
Starting a Kerosene business requires a good capital. You will need to purchase trucks, tankers, etc. But you can lease a truck if the required capital is not available.
Just before you sign any lease agreement, meet an expert in the oil and gas sector or consultant in the field for advice and directives.
Some license are needed in this business which you would need to operate with. NUPENG registration is a must.
You would need to register under the National Union of Petroleum and Gas Workers (NUPENG) alongside your tax clearance, VAT certificate, certificate of incorporation and a sponsor.
You would also need to register under the Kerosene Peddler’s Union and obtain the DPR peddler’s permit.
The actual reason for these registrations is to avoid any manner of embarrassment or problems in the cause of your business or your truck being confiscated on transit.
When you have finished all the required registrations, move to the depot with your money and truck where the product is sold and buy the amount of litre you want.
You can choose to buy from NNPC, PPMC terminals or from independent marketers.
There are places in Rivers State where you can find most of the independent marketers depot like, Bonny island, Okrika and Agip.
You may now choose to setup a mini depot where you can supply Kerosene to retailers, or consumers however the case may be.
One thing in Kerosene business is that the volume and supply also determine the profit you make. Your focal point should be to buy and supply with not less than three truckload of Kerosene twice or once in a week.
This write-up takes insight into the profitability of Kerosene business in Nigeria, current cost and price of Kerosene in Nigeria, and things you must know if you want to be successful in this business.
Kerosene is now sold at the rate of #200 in Nigeria this 2020, thump up to our ever declining economy. Many people still make good cash from this business even though the price is high especially for a litre.
Kerosene is a colourless fuel and a combustible hydro carbon liquid gotten from petroleum. It is widely used in the industries, households, and all over the world for many purposes.
You will be guided on how to get started in the Kerosene business. It is a profitable business if you work diligently.
Procedures to Start Supplying Kerosene in Nigeria Today.
1. Map Out a Plan.
You need to have a workable plan in a written business format after you have done your feasibility study.
One notable thing is that you can’t setup your business in an area where gas cookers are mostly sold.
If you set up your business where a lot of people sell Kerosene you are sure to have competitors around you which you have to devise a means to tackle. You need a good plan to start this business.
2. Get a Location, Container, measuring Unit and sale person
The success of this business requires a location where the demand for Kerosene is high. When you get such a place, get a Kerosene tanker or container where you can store your kerosene for sale.
You can buy an already made one or get some one to build yours to your desired taste. When this is done, find a measuring unit used in your area to sell your product.
You can bring down your price as a form of promo to create awareness of your business and at the same time attract customers.
The next process is to employ a sales person who will keep a good record of your transactions as you may be too busy to do that.
You can train your employee if he/she is not grounded in the work. This will enable you to know if your kerosene business is rising or falling.
3. Get a license.
You are expected to own a license when you start to buy between 10,000 litres and above, meanwhile no license is required when you start with any amount of litre less than 10,000.
Stick to the market strategies you developed. But you should utilise your strategies very well against the strategies of your competitors and the latest trend in the oil and gas market.
Advantages of starting a kerosene supply business in Nigeria
1. As a combustive element for cooking
Some people depend on kerosene oil for cooking especially in rural areas and for low income earners who cannot afford other higher cooking element.
Apart from the low income earners there are high income earners who prefer the use of Kerosene for cooking.
2. As a source of energy
In countries like Nigeria and other part of Africa that lack stable electricity power supply, some people who cannot afford other expensive source of energy use kerosene as a source of energy.
3. For profit and gain
The last but not the least is the profit and gain in kerosene business which is massive but varies according to the market forces (demand and supply).
This is to say that the higher the demand, is the higher the supply, and the higher the profit and gain.
Important Things to Consider in Starting a Kerosene Supply Business in Nigeria
These are the things that are to be considered if you want to succeed in your business. They are the normal day to day factors that affect either sales, profit and quality in any business.
1. Choose a good location for your business because it matters a lot in the business. Good or bad location determines your profit or loss in business.
2. Make sure to find the appropriate agencies to register to avoid embarrassment and your truck from being seized.
3. Construct a durable and long lasting tank
4. Bargain with good suppliers
5. Launch Your business
Challenges involved in starting a Kerosene supply business in Nigeria
1. Enough capital is required to start kerosene supply and retail business. You would need enough capital if you want to hit it big. This makes the business an expensive business venture to begin.
2. Sometimes to get your license and permit in a society like Nigeria may prove difficult except you know somebody in the system who will work it out for you easily.
3. The price of the product is not constant. It changes often. So you must be prepared to adjust especially in its scarcity and when customers become irregular at the Kerosene terminal or depot.