How to Start Kerosene Business in Nigeria

Kerosene is a combustible hydrocarbon liquid derived from petroleum. It is used as a fuel to cook meals in many African countries.
Common uses include cooking, powering engines, lamps and lanterns.  It is used as a heating agent in lighting, cooking, and transportation. The liquid is also transformable into a crease or lubricant.
Kerosene business is very lucrative because of the margins and price differentials.  On a 20,000 litter sale you can make N1, 000,000 million naira.
Trading in kerosene is easy and the business template straightforward. All you need to do is find an ideal location, install a surface tank, get licensed, stock and sell.
Business Location
The best location for the business is in a densely populated area. The area should experience heavy human traffic and vehicular traffic. It could be located in a commercial or residential area.
The amount of space needed should accommodate your surface tank and storage facility. Some good locations are near petrol stations and busy roads. Make sure you take into account safety measures while setting up your surface tank.
kerosene tank
There are some equipment’s you need to start a mini-kerosene depot. You need a surface tank or dispensing pump.
The surface tank should be able to contain 10,000 to 15,000 liters. While the dispensing pump requires a surface or deep storage facility.
Others are measuring can, jerry cans and storage bin. You need standardized measuring units, bottles and kegs. A larger depot would need a kerosene tanker for haulage purposes.
Sourcing the Kerosene
There are two ways to source for kerosene. You could buy directly from NNPC or through an independent marketer.
Most mini-depots get their products from independent marketer. This is because of the bottlenecks they encounter when they try getting it from the source.
Make sure your source is reliable and trustworthy. This is important due to the proliferation of adulterated products. Adulterated products are highly volatile and dangerous. They could cause a fire hazard or even death.
Hire Staff
You need very few staff to successfully run a kerosene depot. You could run the business yourself or hire a sale attendant.
Kerosene dispensers are easier to manage than surface tanks. You can hire anyone with a school leaver’s certificate to dispense the product.
License and Certification
To sell petroleum products you need a license. Register the business with the petroleum product marketing company and department of petroleum resources.
Although the process is tedious you would be awarded a certificate and permit to buy directly from the source (NNPC). This will effectively increase profit margin and access to quality product.
However retailers that deal with only 10,000 litters at a time do not need a license. They can only purchase the product from independent marketers.
The only marketing you need is a good location. You need a sign board and print flyers and posters. The product is an essential commodity for cooking so customers will come. You need to keep your prices competitive to attract patronage.
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