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How to start a Kerosene Business in Nigeria
Even though most middle and upper-middle class Nigerians prefer cooking with gas,the need for kerosene has not been completely eliminated. This is because a number of low-income earners in Nigeria surpass the middle and upper-middle class and for this category of people, cooking with kerosene is much more affordable.
A lot of middle class citizens still use kerosene for cooking alongside gas. So, if you are thinking of going into kerosene retail business, demand is certainly not a problem.
Some of the things that you would need to start your kerosene business include-:
You cannot just start kerosene business without proper registration and licensing. You need to register your business with the Department of Petroleum Resources (DPR) and the Petroleum Products Marketing Company (PPMC).
Upon registration, you would receive a certificate which would permit you to buy your kerosene in wholesale directly from the NNPC. This makes it possible for you to have access to products cheaply. However, this process takes time and of course, would cost you money.
But if you want the easy way out, you can become an indirect marketer. As an indirect marketer, you would source for your products from registered marketers. Although, you would get products at a more expensive rate compared to buying directly from the depot.
You need a strategic location to sell your products. Some kerosene marketers own filling stations which they use in selling kerosene alongside other petroleum products but if you cannot afford to build yourself a station, you can just set up a depot in a safe place.
I have even seen people set up kerosene mini-depots in front of their homes. However, you must take issues of safety very seriously if you decide to go with this option.
3. Dispensing Pump
To make it easy for you to sell your product, you should get an automatic dispensing pump. You can easily get them from dealers in major Nigerian cities.
However, if you still don’t know where to get one, you can try to ask from people who are already into the business; they can easily point you in the direction where they got theirs.
An automatic dispensing pump would make your job really easy as you would be able to easily measure your products and charge your customers correctly.
4. Petroleum Tanker
This is only necessary for people who are starting kerosene business on a large scale. If you have registered with PPMC and DPR and want to be buying your products directly from the depot even start supplying other kerosene sub-dealers, you would need a petroleum tanker to move your products around easily.
The amount you need to start a kerosene business would depend on the scale you wish to operate. With about N200, 000, you can set up a small-scale kerosene business in your neighborhood or somewhere close. But if you want to operate this business on a large scale, you should be ready to spend at least 1 million naira.