How To Start Kerosene Business In Nigeria
Kerosene also known as paraffin or lamp oil is one of the finished products from refined crude oil. Have you thought of starting a kerosene business in your area or even supplying it to retailers and companies? Kerosene is one of the most essential petroleum product in Nigeria and is used extensively in both rural and urban areas. It is one of the most popular products of refined crude oil because of its use and demand. Almost every home make use of Kerosene in Nigeria in
one way or the other. This is why people always experience hardship whenever kerosene goes scarce. The other products known as fuel and diesel. Kerosene is equally one of the petroleum product in Nigeria that make huge money for the oil and gas entrepreneurs. People are said to be making millions of naira in the business everyday and from my findings.
Kerosene is a business that is worth investing into. it is a lucrative business that you can make your entire investment capital back under one month of sales.
Why Is Kerosene Business In Nigeria Very Lucrative? The use of kerosene as a cooking fuel is perhaps the number one thing this product is used in Nigeria. It also serves to power lanterns which are very common in Nigeria owing to the epileptic power
situation in the country. Basic reason for the profitability of Kerosene is the high demand for the product caused by the very high population of low income earners in Nigeria. 11,000,000 liters of Kerosene is said to be consumed everyday and the demand can only get higher due the ever increase in population. According to statistics, about 8million liters of this 1.2million barrels of this product is consumed daily. This gives an idea about how lucrative selling of this product will be if anyone chooses to venture into this business. The disparity in the product pricing is probably the biggest reason why
Kerosene business is very lucrative. Most people are ignorant of the real official price of DPK but the dealers knows exactly and are cashing on peoples ignorance to make huge profit even if it is unjustified. Base on NNPC who officially sells it as 50 naira, so you can buy from NNPC who sells at N50 per liter and you can sell to others at N100 per litre. All you need is to know the right people at the right places that is what the owners of filling station and other dealer do. It is not my place to judge as they taking advantage of people ignorance, it is for the government and the price regulatory body to do some thing about it. If you can get at lest 10,000 liter of kerosene from the NNPC or other major dealers like the capital oil and sell 100 per liter and gain 50 naira per liter, you will gaion N50× 10,000=N500,000. one of the dealers who is currently dealing on kerosene said he confirmed that he made N1,900,000 profit from 33,000 liters of Kerosene.
What You Need To Get Into Kerosene Business
The kerosene business is one of the easiest business to start and the capital that is required is not that much compared to the other oil and gas related businesses. The capital you need may not cost more than N700,000 at most N1,000,000 depending on the level you want to start from.
This is the first thing you need to consider in starting up a kerosene business. Since the sale will be from the surface tank, you will need a business place or location where you can put your tank. Situating your business in or close to a populated residential area will give you more earnings as you sell more. In which ever way, you may just budget N30,000 at most for that. In some cases, you may even get it for free depending on who you know.
This also one of the most important thing that you need in starting your kerosense business. If you want to be able to operate legally and be able to get products from either the NNPC or independent marketers, you have to register with Department of Petroleum Resources (DPR) and Petroleum Products Marketing Company. You have to get Register and have license it is very important if you are to purchasing more than 10,000 liters. But if you want to be dealing below that then is not to
important for you register and obtain license. Some state before you open your kerosene business you will have to register with kerosene sellers association.
Another important aspect is storage facility. The Welders will construct a very good surface tank for you. Underground storage tanks are by far preferable because of its safety. Construct 10,000 liters volume tank but let them make it 10,500 liters to be able to accommodate all your Kerosene.
Source for your product
This is another crucial aspect of setting up this business. Independent Marketers controls more than 60% of Kerosene sales, while NNPC controls maybe 40% of the sales through the Pipeline and Product Marketing Company, a subsidiary of NNPC. If you do not have products to sell, then you are not involved in the business in the first place, it is important to find and engage reliable suppliers. You can get the product from other Independent marketers, Capital Oil Ltd and the rest. There are other countless sources where you can buy Kerosene but beware of adulterated product. You may be arrested if the Kerosene get
exploded in peoples home.
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