How to Own a Petrol Filling Station in Nigeria

This is article contain a step-by-step guide on how to own a petrol filling station in Nigeria. Though oil prices fluctuate, the oil industry is a largely lucrative one and is the mainstay of Nigerian economy. The oil and gas sector is divided into upstream and downstream sectors.

The upstream sector deals with drilling crude oil from oil wells while the downstream or midstream sector deals with refining crude oil, distribution and marketing of oil products.

Petrol stations fall under the latter. The products mostly sold at petrol stations are diesel or AGO (Automotive Gas and Oils), petrol or PMS (Premium Motor Spirit) and kerosene or DPK (Dual Purpose Kerosene).

This business is highly regulated in Nigeria now because the Nigeria government pays heavy subsidy on imported finished products.

But how does one own a petrol station in Nigeria?

Steps 1: Decide how you wish to operate

You can decide to be an independent marketer and operate with your own name or affiliate under a known brand like NNPC, Texaco, Oando, etc. Either decision has its attendant advantages and disadvantages.

Read: Advantages and Disadvantages of Independent Filling Station in Nigeria

Operating under a known brand attracts benefits because your petrol station will be known, and this may increase your turnover.

You pay for product through them and they bear the responsibility for shortage in transit unlike an independent marketer.

But in most cases, you are expected to meet some preconditions and subjected to periodic supervision of facilities and services by officials of the mother company.

But an independent marketer who chooses his own name may struggle for a while in business especially because it is still new.

Community people and touts may also be harassing this station for petrol because they feel you can easily be intimidated. You can only choose one at a time and one has to be sure if he wants to operate as an affiliate.

Step 2: Do a feasibility study

Petrol stations have maximum turnover when they are located along motor-able and busy roads. Consider the nature of land you wish to construct your station on.

The engineering construction of a mini-office, underground storage tanks, generating set for alternative power supply, a canopy

housing the forecourt where the dispensers will be mounted, concrete flooring to sustain the pressure of heavy-duty vehicles, nature of dispensers (electronic or manual) to be used, muster point (fire accident free area).

It is important to note that capacity of underground tanks varies. Fifty thousand CBM underground tanks go from eight hundred thousand naira to one million naira only. After this, the next is licensing because Department of Petroleum Resources (DPR) approves location of petrol station.

Related: Capital Needed to Set Up a Petrol Station in Nigeria

Step3: Get a license

You will need to get a license from Corporate Affairs Commission. All known business entities in Nigeria are registered with them. Also, you will need a license from Weights and Measure which is a department of Ministry of Industry, Trades and Investments.

The next is Department of Petroleum Resources (DPR). DPR is a major federal body license department and just like weights and measure, its licenses are subject to renewal.

Also, filling stations are registered with state ministry of petroleum or petroleum taskforce. It is noteworthy that all these bodies periodically send their officials to ensure that operators maintain standard and if they are found wanting, the petrol station is shutdown and will be reopened when abnormal conditions are corrected. Sometimes, defaulters pay heavy penalties for it.

Read: New Steps to Register and Incorporate Your Business in Nigeria to PLC or LTD

Step4: Actual Construction

Burying the underground storage tanks is a risky process. This should be carefully done. After the tanks are buried, it is properly calibrated using dipping sticks which are used to measure the quantity of products in underground storage tanks. This work should be done by expert.

The perimeter fence guards the tank area and directly opposite it is the muster point – most taskforce officials ask for it.

The generator house should be away from the area where the storage tanks are buried. Build a house which consists of offices for – manager, supervisor, cashier, customer attendants and security man.

It may also have a lube bay, restaurant/shop, car wash, wheel alignment area, depending on choice. There should be a small gate which regulates vehicular entrance and exit.

There are always more dispensers for PMS and probably one or two of each for AGO and DPK respectively depending on budget and choice.

Step5: Recruit workers

Employ a manager, supervisor, cashier, security man, and many customer attendants. There may also be the need to run shifts if sales are very high.

Manager will be the overseer of everything and reports to you. A supervisor discharges trucks and reports to the manager.

Cashier handles cash and balances books buy copying opening and closing meter reading of each dispenser. Security man guards the station. Customer attendants sell product to customers.

With all this in place, your petrol station is good to go.

Do you need help in starting this business or have any question to ask? let me know in the comments section below

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