This article will explain how to start kerosene business in Nigeria currently in this year 2023. While cooking gas is preferred by the majority of Nigerians in the middle and upper classes, kerosene is still very much required. This is due to the fact that low-income earners outnumber the middle and upper classes in Nigeria, and cooking with kerosene is significantly less expensive for this group of people.
Have you ever given any thought to launching a neighbourhood kerosene business or providing local shops and companies with it wherever you may be in Nigeria? Nigerians use kerosene extensively in both rural and urban areas, making it a crucial petroleum product in the country. Nearly every family in Nigeria uses kerosene, commonly known as Dual Purpose Kerosene (DPK) or, for the purpose of this post, Household Kerosene (HHK). Kerosene is a petroleum product that generates a large amount of revenue each month for Nigerian oil and gas business owners, which is one of the main reasons you should start yours right away if you have the desire for it.
HOW LUCRATIVE IS KEROSENE BUSINESS IN NIGERIA TODAY?
The high demand for the commodity, which results from Nigeria’s disproportionately high number of low-income earners, is one of the main factors contributing to the profitability of kerosene. It is estimated that eleven million litres of kerosene are used daily, and demand will only rise as the population rises. Nigeria’s insufficient electrical supply is another factor. Most homes rely heavily on kerosene for cooking and other domestic energy-related needs and simply cannot function without it.
Because there is such a high demand for kerosene, most dealers complete their transactions quickly and then come back to purchase more. Thus, as the number of round trips increases, they make a growing profit. Definitely the main factor in the success of the kerosene industry is the price difference of the product. The majority of customers are uninformed of the actual official price of Household Kerosene (HHK), but dealers are fully aware of this and are making substantial profits off of their ignorance, even if it is unjustified.
GUIDE ON HOW TO START KEROSENE BUSINESS IN NIGERIA 2023
The following are the step by step processes on how to start kerosene business in Nigeria this 2023:
MAKE AVAILABLE THE CAPITAL FOR YOUR KEROSENE BUSINESS
The amount of capital needed to launch your kerosene business in Nigeria varies depending on the scale you want to operate on. You can start a small-scale kerosene business in your community or close by with about ₦200,000. However, you should allocate at least ₦1 million if you plan to run your kerosene business on a large scale.
GET THE REQUIRED CERTIFICATION FOR YOUR KEROSENE BUSINESS
You cannot start your kerosene business in Nigeria without the required registration and license. Your kerosene business needs to be registered with the Petroleum Products Marketing Company (PPMC). After enrolling, you will be given a certificate that will allow you to buy kerosene in large quantities directly from the NNPC. You may buy products for less because of this. However, this procedure is time-consuming and naturally expensive. But if you take a simpler path, you can work as an indirect marketer by purchasing your kerosene from registered marketers. Nevertheless, the cost would be more than if you had bought from the depot directly.
FIND A GOOD LOCATION FOR YOUR KEROSENE BUSINESS
In order to sell your kerosene and make very good profits from it, you will need to locate your kerosene business at a prominent position where people can easily locate it. Although some kerosene marketers have their own filling stations where they sell kerosene with other petroleum products, if you cannot afford to build your own filling station, you can just set up a depot in a safe place. A lot of people erect little kerosene storage facilities/depots in front of their houses. You must, however, take safety very seriously if you select this path.
INVEST IN AN AUTOMATIC DISTRIBUTION PUMP
If you have the means, you should get an automatic dispensing pump to make selling your kerosene simpler. They are easily available from dealers in Nigeria’s major cities. If you are still unsure of where to get one, however, you may ask individuals already working in the field; they will be able to point you in the proper direction as to where they got theirs. By enabling you to precisely measure your products and bill your customers, an automatic dispensing pump would greatly simplify your job.
INVEST IN A PETROLEUM TANKER
This is only required for those who want to launch a large-scale kerosene business in Nigeria. To easily transport your products, you will need a petroleum tanker if you have registered with the PPMC and want to buy them directly from the depot or even start supplying other kerosene sub-dealers.
Kerosene business is a lucrative business and you can start it either as an independent marketer, a registered marketer or a distributor. This article is purely for informational purposes and some of the steps may change as you go about your findings in real time. Kindly take note.