When we’re talking about petroleum products selling business, we’re referring to the buying and selling of petroleum products. In this context, the business location, in this case, is Nigeria.
Petroleum products selling business is one business with a guarantee high profits or Returns On Investments (ROI) within a short period of time.
There are many kinds of petroleum products in demand in Nigeria today. They include Petrol, Diesel, Liquefied Petroleum Gas (LPG), Bitumen, Lubricants etc.
This guide will guide you on how to start a business on any of these. It is a simple discussion on what to do and how to do that.
Definition Of Some Common Terminologies
This is crude oil found in rocks. Crude oil occurs naturally in sedimentary rocks and consists mainly of hydrocarbons. A wide variety of commercially important petrochemicals, including gasoline and kerosene, are derived from it.
A Colorless flammable oil: This is colorless, flammable oil distilled from petroleum. It is used as fuel for jet engines, heating, cooking, and lighting.
This is a fuel designed for special cars, trains, and other automotive engines etc. designed for this purpose.
These are tanks or big metal containers, usually spherical or conical in shape, laid underground for the storage of petroleum products. This is always done for safety and avoidance of easy explosions.
Petroleum products selling business is highly profitable. One of the reasons for this is that it involves the buying and selling of the products in bulk and selling.
Of course, bulk interests are anticipated from this kind of business. In fact, you make lots of profits when you buy it when the price is moderate.
A time comes when the product becomes scarce or available but costly. When this happens, you make almost triple profits from sales.
Petroleum products such as include engine oils, kerosene, petrol, diesel etc. have high market demands. Your customer base is so wide that there is almost no possibility for loss in the business. Some of your customers include car owners, factories, housewives, heavy-duty vehicles etc.
Kerosene, for example, is a foremost and highly valued and demanded petroleum product in Nigeria. A very large percentage of Nigerians use this product for cooking and lighting. On the overall, petroleum products selling business is very profitable in Nigeria.
Market Structure/Demand Analysis
There is a wide market for petroleum products selling business in Nigeria. The market, for now, is not porous. However, citing the business near competitors is not very healthy or advisable.
If you have a filling station, for example, closed to you, you are likely to witness reduced sales per day. Instead, take it out to a distant location away from excess competition.
How To Start Petroleum Products selling business In Nigeria
Below are the steps to guide you on how to Start Petroleum products selling business In Nigeria:
This business does not need a certificate to operate. However, having good knowledge of the Nigerian petroleum industry is very important.
Certification in any of the many petroleum-related courses is very important too. But where these are lacking, a bit of experience and training from experts in the business is recommended.
It is very easy to operate once your money is ready. To really succeed you must have special skills in marketing, you must be able to communicate very well too. You must have a good relationship with clients.
The only thing you will need to know is where to buy it cheaper. If you can buy it straight from the refinery or major dealers’ depot, you will make stupendous profits.
Read Also: Top 11 petroleum products and their uses
Not much certification is needed, except, perhaps certifications from schools. But as governing the business, you need certification of tax clearance, Certificate of Occupancy, Certificate of business registration from the Corporate Affairs Commission (CAC) etc.
To avoid making expensive mistakes, consider getting a professionally written petroleum business plan. Employing a professional business plan writer to do this for you is highly recommended. Hire a good architect to help in designing the filling station.
Also, get a good contractor for the construction of the filling station. Get necessary permission before setting out a site.
This is to avoid your business premises being destroyed by the government. This is the urban/town regional planning aspect of the business.
If you do not have enough capital for erecting a filling station, you can use containers or rubbers for a start. Upgrade from this when you are buoyant enough for a full-fletched filling station.
Do not limit any research work. Get a good surveyor to check out the type of soil topography suitable for the building.
Ask filling station owners how they started, how they can help you succeed, where to buy at a cheaper rate. Get to know the type of products to avoid and the ones to buy.
Also, find out when to buy and when to pause. This will go a long way to save you from expensive mistakes. Plan on the capital needed, containers to purchase, location to be placed etc.
Licenses And Permits
This business is a highly profitable business. So, it is expected of you to get the needed licensing and approval before starting it out.
Go to your local town, the urban planning authority to get licensing and approval of business. For those going for filling stations, you need it the most.
You need a truck, a container, underground tanks, premium spirits meters, pumps etc.
For filling stations you need to employ competent workers to help in the sales of the fuel, diesel, kerosene and, engine oils. Hire a professional accountant, a manager, a receptionist, security personnel, and a secretary.
You do not need most of the above if you are just starting on a small-scale. At that level, you need to operate it alone so that you can effectively monitor the business.
But in a situation where you have other jobs, it is advisable that you get a sales boy or sales girl to run the business in your absence. Yours may be to supervise and make concrete decisions.
This is a type of business that allows you to do multiple jobs while it is still running with or without you being present.
Go to filling station owners to advise you. Meet those dealing with petroleum products to guide you. They must have long-standing experience in the business before you start.
Advertising & Profitability/Sustainability Strategies
Locating this business near the roadside where people will easily see and buy from is the greatest advertisement method.
Do well not to sell it at the exact price other filling station owners are selling if you want to make quick sales. At least, N5 difference is something. This will bring you quick patronage.
Treat your customers well with the popular “thank you come again” slogan. It makes them feel they are respected and will come again to patronize you. Having many sales staff makes it easy for customers especially those who were in a rush.
Read Also: How To Start Engine Oil Business In Nigeria
Be vigilant! Do not fall into the wrong hands. No matter how profitable the business is today, it might be affected tomorrow if not well-managed.
This happens more often when the business has grown large. You need patience and persistence and effective marketing strategies if you must be sustainable in this business.
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