Petrol Filling Station Business Plan in Nigeria – Feasibility Study on Petrol Filling Station
This sample petrol filling station business plan in Nigeria has been written to be used to access bank loans, grant applications, business proposals, competitions, etc.
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ACCOUNT NUMBER: 3066880122
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Petrol station is an outlet or depot that procure refined petroleum products (Premium Motor Spirit (PMS), also called petrol; Automated Gas Oil (AGO) known as diesel; kerosene; and household gas) in bulk, stores it, and resell by use of pump to customers. Gas station in Nigeria is also called petrol station or filling station.
Nigeria is one of the oil producing country of the world and one of the major fuel consumer in Africa with about 50 million litres (estimate) daily consumption, we wouldn’t expect less from the giant of Africa. This is a resultant of the pool of vehicles, numerous generating set and house hold use of this fuel which has escalated over the years.
One of the advantage of pump station in Nigeria is that the demand for oil is very high with little effort put into commercials, sale is guarantee if location is good. Even though there are big dealers in the market, dealers like AP, Mobil, Texaco, MRS, Total, Oando, yet the supply isn’t enough and more suppliers are billeted.
There are two ways to ways go about setting up a petrol filling station in Nigeria. One can go as an autonomous filling station or a Reliant filling station.
Autonomous gas station or independent oil marketer is a filling station that is ran under the business name its initiator. The owner of the filling station names and runs the filling station independently. This filling station gets its oil directly from Nigerian National Petroleum Corporation, having purchase representative at the petroleum product marketing company (PPMC).
It features running your business under your own chosen business name, creating a niche for yourself with your brand. You’ll have to put in place logistics you would employ to ensure that your product is delivered to your filling station promptly. This can be by in house logistics system or you out source at the logistics company. You’ll need at least three tankers with a capacity of 30,000 litres each (half trucks). You can also employ the service of Logistics Company to carry your product for you on a one time agreement or periodic service.
You are in charge of drafting out and developing your business policy and trade terms. Making your business known, establishing your brand and expanding your horizon depends solely on your advertising scheme.
Payment for the petrol product from NNPC requires the use of bank draft issued in the name of NNPC, to be paid to the CBN branch of the state you intend to carry the fuel from. Every time you carry fuel, IPMAN charge you #5000 for insurance and association fee. The risk of carriage and of the transit of the fuel rest on you or the insurance company you transfer that risk to.
Reliant filling station or dependent oil marketer is a filing station that holds the product of another marketer. This type of station, the charter is owned by another filling station, usually a big one like AP, Mobil oil, Total, Oando etc. and the station just serve as a sales point for the product of that major marketer. It markets under its own business name, facilities and premises for an already established major oil business.
It structures around building of your business off the brand of a major marketer or an already established business. Your business need not a lot of experience to establish since a bit of the resources of the business brand is readily available for your utilization, because you are riding on the back of a major marketer in the industry. This may impair to an extent the opportunity of establishing your very own brand.
There is a transfer of customers as you inherit the customers that reside in the area of your establishment and current customer ply the routes. This inherited customers is a plus on you building your business.
You also enjoy the benefits of using the logistics of the marketer to deliver your product. You are also influenced by the marketer’s policies and terms,
You wouldn’t need to go through the stress of paying through the bank draft to NNPC because you can simply pay into the account of the major marketer supplying you the product. One down side to this mode is that a bit of your gain is also going to the brand name you are marketing for. The price of lifting from these major marketer is higher than the NNPC depot as they already add their profit to it thereby reducing your own profit margin.
Research and study: The first study I want to you to conduct is concerning the funding of the station, we all know oil business a capital intensive business; the research should put into account all funds needed for the setup, facilities, product and catering for the business. How much do you have presently, how much money you can pool in the nearest future are questions that must be answer before you venture in setting up this business.
Make research about the location you intended for your Petrol station. This is very important as it will help your decision making and form part of your documentation. Location must be accessible, near a major road, spacious to accommodate the type of filling station you’re setting up. Land acquisition is a vital part of the location study. For a setup of two petrol pumps, one diesel pump, one kerosene pump (which is by the way the smallest the IPMAN regulation allows in Nigeria), two plot is required. Depending on the location, the price might range from #2m to #20m for acquiring and processing of the properties papers for the land.
You will also need to draft out the business plan which you will perfect as you go on. Your plan will consist of your aim, your goals to achieve your aim, your vision and mission statement. This plan will have check points to measure your progress.
You will also need to research the various regulations that bind the setting up and running of filling station in Nigeria, get to know the permits and the requirements for the associations before venturing into the business.
Legalize your company and get your Petrol station licence in Nigeria. It will be required of you to register your country with the corporate affairs commission of Nigeria to have a legal name for your business because it is a requirement for obtaining your certificate of incorporation which you will need to obtain your license of operating a filling station. You will also need to obtain your tax clearance.
You will also on your way to make your business a legal entity need to obtaining licenses, approval and permit to run your filling station. To start setting up and get supplies of petroleum, you’ll need to obtain licence from these bodies:
- DPR – Department of Petroleum Resources
- PPPRA – Petroleum Products Price Regulatory Agency
- PPMC – Pipelines and Products Marketing Company
- NNPC – Nigerian National Petroleum Corporation
After the licences and permits are in place, you will also need to join these petroleum association. They tend to help protect your interest concerning petroleum sale issues
- IPMAN – Independent Petroleum Marketers Association of Nigeria
- NUPENG – National Union of Petroleum and Gas Workers
Registration, Licencing, permits and association registration may cost up to #1.3m.
You definitely need to insure your business not only because it is a requirement but because this business is a very risky business; all product are highly inflammable so you will need to insure against fire insurance; the truck is also prone to hijack and because this business also involve the movement of large cash, its prone to theft so you will also insure against theft; and as many other insurance you deem fit and you can afford.
Facilities building: you will need the services of a petrol station engineering company. After you must have considered and selected a size of petrol station, you will need the services of these engineers to bring it into physical being.
Building: this is dependent on your station size and what you’ll like to be in the station; Restaurant, Supermarket, and Car Wash etc. it’s a require men to have bay in your building or on your filling station premises.
Pumps Shelter: The shade constructed over petrol station pumps, it protect the pumps and the petrol attendants from the weather conditions.
Storage tanks: After acquiring your property, before you fill the land if necessary, you will sink your underground storage tank. Storage tanks measurements vary depending on the size (between 35,000 liters and 65,000 liters) and the space you have. You will definitely need at least three underground storage tanks, one for each product. Usually, petrol storage tank is bigger because it sells faster and you will to stock large amount of it.
Fence: by regulations, it is require to make fence all around the sides of the petro station, as far as there is no access route there. This helps to increase security in and around the petrol station. It is also required to provide access gates on sides that has a route to link and provide easy access in and out of the filling station
Flooring: The petrol station needs a fairly flat ground so you might need to cut or fill as the topography may warrant. You’ll need a very firm concrete floor to accommodate the huge pressure that the diverse number of vehicle coming in and out of the filling station will exert on it and also to accommodate those vehicles as you dispense fuel.
Standby Generator (25kva to 60kva): we all know that the power supply in Nigeria is erratic, so need for a steady power supply to power your pumps. Besides, standby generator is one of the requirements for approval.
Pumps: there are two types of pumps, the analogue and the electronic. The analogue pumps are outdated. They use the analogue counter to dispense fuel. Electronic pumps gives you the freedom of advance technology as some pumps have Point of Sales (PoS) slot, most come with a ‘dispense pre-set module’ and other accessories. The pump that dispenses the fuel, you will need at least 4(two for petrol, one diesel and one for kerosene)
Staffing your petrol station: the petrol state needs four categories of personnel to run the business fully at the inception. The staff number depends on establishment level and hours of work. Usually most of the staff will work on a shifting.
Manager: the manager is the highest in rank in the filling station. He handles the managerial functions in filling station. He is the superior with the responsibility of the whole operation of the petrol filling station and must be vast in running the oil business. All other employee reports to him while he report directly to you. You don’t necessarily need to interact directly with all your staff because they can go through him to get to you.
Supervisor: he is the next in line to the manager, he is charged with the smooth operation of the filling station. He ensures everyone and everything including the facilities are in order. He sees to it that everyone is up to his task and report back to the manager. He performs other basic supervisory duties.
Cashier/Accountant: a personnel that handles the financial computations of the business. This person sees into the movement of the cash submitted by the attendants, keeps the records of the cash transactions and process cash for the use in the filling station by approved authority. Depend on how you want it, he will report to the manager and submit periodic financial statement and reports.
Attendants: to reduce fatigue, you might need to employ two or more petrol attendants for each pump. They would work in shifts, one person at a time. The total number of attendants you employ will depend on the number of pumps you have and other services you offer e.g. supermarket attendant
Security: also very needed is security guards to secure your assets, your money and maintain order on the premises of your filling station. As a way to increase security, I will advise you to move your cash in bits and you ensure you do not leave plenty of cash within your petrol station.
Keep in mind the overhead cost for the running of the filling station, the salaries of your employees, the cost of purchasing, transporting and storage (insurance) of the petroleum product while planning( writing business plan) and setting up the fuel station.
On the average, depending on location, it cost roughly around #80m to #150m, though that’s not the maximum but for a small size in a middle class neighbourhood, it should establish a pump station. The return on capital is so high that profit ranges from a million naira a month to five million naira a month. It is to be noted that from previous observation and current trends, even if the price of petroleum is tripled over night, it will still make its sale.
Get your own Sample Petrol Filling Station Business Plan in Nigeria ! To place order, Pay N10,000 to:
BANK NAME: GUARANTY TRUST BANK (GTB)
ACCOUNT NAME: CHIBUZOR TOCHI ONYEMENAM
ACCOUNT NUMBER: 0044056891
BANK NAME: FIRST BANK PLC
ACCOUNT NAME: CHIBUZOR TOCHI ONYEMENAM
ACCOUNT NUMBER: 3066880122
After payment, send your full name, email address and topic (i.e. gas station business plan pdf) to 07033378184. Your business plan will be sent to your email within 15 minutes.
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