Petrol Filling Station Setup Requirement
Until electricity supply becomes stable in Nigeria and all vehicles powered by Petrol/diesel is converted to electric cars, the sales of refined Petroleum product will remain the most profitable business in Nigeria.
The daily demand for Petrol has steadily increased over the years; this is due to the fact that we now have more cars/trucks on Nigeria roads and epileptic electricity supply nationwide that has forced all homes/businesses to depend on generators for their electricity needs.
Petrol Filling Station Setup Requirement
According to a recent Department of Petroleum Resources (DPR) report, Nigerians use more than 50million liters of Petrol on daily basis to power their Cars and Generators at homes/offices.
Distributing these 50million liters of Petrol and diesel in Nigeria is usually done through a network of Petroleum Pipe lines, use of delivery trucks and Petrol filling stations to dispense it to motorist across the nation.
I will like you to know that the process of distributing and dispensing petroleum products across Nigeria is a huge task; but in spite of the inherent challenges, most major/independent oil marketers in the country like Mobile, Total, Oando, and Texaco are on daily basis smiling to the bank.
So Setting up a Petrol filling station as an independent oil marketer is one good opportunity for any investor to make huge profit from Petroleum business in Nigeria.
Prices of Refined Petroleum Products in Nigeria (2019)
Below are the current retail prices of refined petroleum products in Nigeria.
Petrol – N145.00 per liter
Diesel – N220.00 per liter
Kerosene – N300.00 per liter
If you multiply the current price of Petrol of N145/liter by the country’s daily fuel consumption put at 50million liters, you will be shocked to discover that Nigerians spends a whooping sum of N7, 250,000,000 daily on Petrol.
Assuming you own a Petrol filling station in Nigeria and you purchase a 30,000liters tanker load of Petrol from an NNPC deport at N134/liter and sell in 5days, you are sure to always smile to the bank with profit made from sales of not only Petrol but Dieseal and Kerosene as well.
With the above information, I know you can’t wait to build your own Petrol filling station in Nigeria and make huge profit.
To start a Petro filling station business in Nigeria, below is the Petrol Filling Station Set up Requirement In Nigeria that must be met.
Write a Feasibility Study
Before embarking on the setup of the Petrol filling station, I will strongly advice you to carry a thorough research and then write a feasibility studies that will guide you in taking the right decisions as you implement the business idea.
Chose a Suitable Location for the Petrol station
Sitting up your petrol station in the right location is certainly a good business decision and failure to do so will be a disaster.
Below are locations that are most suitable for setting up a Petrol filling station in Nigeria.
- A busy environment ideal for setting a Petrol filling station ( e.g Market, Motor Parks, roundabout, industrial layouts)
- Your petrol station should be sited along a major road where vehicles owners can easily access.
- You can also site your Petrol filling station along express ways that links two or more towns and cities to help meet the fuel need of drivers travelling long distance.
Land Requirement for Petrol Station
After choosing the right location to site your Petrol filling station in Nigeria, next step is to purchase or lease a piece of land to build the structures needed to commence smooth operation.
Two plots of land is the ideal space required to build your petrol filling station anywhere in Nigeria. Two plots is wide enough to accommodate the stations building, facilities and also allow vehicles to queue to buy fuel and make exit turns.
Startup Capital Needed for Petrol Filling Station
Setting up a petrol filling station in Nigeria is capital intensive but one is sure to make high return on investment over time. The initial capital required for setting up a petrol filling station in Nigeria (2019) starts from about N60million and above depending on your location and capacity of the fuel station.
Before you start building your petrol filling station, I will advice you secure the services of a qualified construction engineer will handle the project effectively from scratch to completion.
Below are the types of building and facilities needed in your proposed Petrol station.
Construct an Operational building: This building (a Bungalow preferably) will accommodate office space, a super market and a restaurant.
Note: You can construct additional structure to accommodate a car wash, mechanic workshop and a gas plant to generate more revenue from the Petrol station.
Construct a Canopy over the Petrol pumps: There is a need to construct a shade over petrol station pumps to protect the equipment and also provide cover for the station attendants against the sun and the rain.
Construct a Perimeter fence: One of DPR regulatory requirement is that all three sides of a Petrol station in Nigeria must be fenced, leaving only the entrance open for easy entry and exit of vehicles.
Also, DPR says, a Petrol filling station on a T-Junction must have two sides fenced and the rest two sides be remain open for easy entry and exit from both joining roads.
Hardcore flooring – The Petrol station floor must be constructed hardcore concrete so it can withstand pressure from vehicles of different sizes and capacity entering the petrol filling station when it starts operation.
Install underground fuel Storage tanks
The Petrol, Diesel and the Kerosene you intend to dispense in your proposed Petrol filling station are highly inflammable materials and as such, they must be keep safe in an underground storage tank.
To purchase an underground petrol storage tank, you will need the services of an experienced metal fabricator to build you quality fuel Storage Tanks that will not leak or rust after installing it underground in the Petrol station.
High volume underground fuel storage tank, like the 45,000 and the 60,000 liters is recommended for a Petrol station. The average cost of constructing an underground petrol storage tank in Nigeria starts from N3 Million and above.
Install Petrol Pumps
To dispense refined petroleum products to motorist, you will need to purchase some Electronic fuel pumps and install them in your petrol filling station.
The number Petrol pumps you can install depend on how large or small you want your Petrol station to be. But a minimum of four fuel pumps is okay of, which you will deploy two to dispense petrol, one for Diesel and one for kerosene. The average cost of buying an Electronic fuel pump in Nigeria is about N900, 000
Install Standby Generator
Constant electricity is needed to run a Petrol filling station but because of the epileptic power supply in Nigeria, you will definitely need a standby generator (25kva and above) to provide power whenever public power supply is disrupted. The average cost of buying a 30 kva generator in Nigeria is about N4m – 5 million.
Petrol Station Staff Requirement
To run your Petrol station efficiently and profitably you will need to employ workers who will handle its day to day operations. Below is the staff requirement for a petrol filling station.
Petrol station Manager: He is the main man in charge of the day to day running of the petrol filling station and must be experienced with the running petroleum business.
All other workers in the petrol station reports to him while he in turn is accountable to you. Carefully chose this person, Petrol station Manager can be make or marred your business. They are cases where managers run down the businesses.
Supervisor: His job is to move around the Petrol station to ensure all things is in order, both the facility and the staffs. He sees to it that everyone carry out their assigned duties and he/she reports back to the manager.
Security: Oil business is a high risk security venture because of high cash flow rate, so to safe guard your investment and work force you need to employ some security personnel to man your Petrol filling station daily.
Petrol Station Attendants
The main duty of a petrol attendant is to dispense fuel to motorist and accept payment from them. You will need to employ one or more attendant to handle each petrol pump on shift basis to reduce the risk of fatigue and burnout.
The duty of the cashier is handling cash proceeds from sales of Petroleum products and also keeps records of all transactions in the petrol station. So you will need to employ an experienced account that can use functional efficient software to keep accurate record of you cash movements.
Petrol Station Registration Requirement
In other for your Petrol filling station not be tagged Illegal by government, there is need not do all the necessary government registration.
First of all you need to get your business registered with The Corporate Affairs Commission of Nigeria (CAC) and obtain the certificate of incorporation which is a requirement for getting operating license for Setting up a Petrol filling station in Nigeria.
Next is to start the process of getting Petrol filling station operating Licenses, approval and permit from the Nigeria government agencies listed below.
Department of Petroleum Resources (DPR)
Petroleum Products Price Regulatory Agency (PPPRA)
Pipelines and Products Marketing Company (PPMC)
Nigerian National Petroleum Corporation (NNPC)
Below is the Procedure and conditions for granting petrol filling station license and approvals for the construction and operation of a petrol station.
- Petrol station Application procedures:
Application for approval to construct a filling service station for retailing Petroleum produces shall be submitted to the Department of Petroleum Resources, DPR (http://dpr.gov.ng/) giving details of the proposals and any information that may be relevant to the project. In addition, the following documents should be submitted along with the application
i. Three (3) copies of approved plan showing the building existing or proposed on the site and the relation of the site to the roadways and adjoining property;
ii. A certificate signed by signed by the Chief Federal/ State Fire Officer, or by an officer authorized in that behalf, that the arrangement proposed for the prevention of fire at the site are satisfactory;
iii. A certification by the Area/Town Planning Authority for the construction of a Petrol Filling Station on the proposed site;
iv. A certificate signed by the divisional police Officer or a superior police officer in-charge of the police motor traffic that he is satisfied that the site and layout of the proposed filling station do not constitute an unnecessary traffic hazard.
v. Evidence that company applying is duly registered as a limited liability company by the appropriate Federal Ministry/Corporate Affairs Commission to deal in petroleum products as follows:
1. Certificate of Incorporation.
2. Certified True Copy of Memorandum & Article of Association.
vi Tax receipt and/or tax clearance certificate for the preceding 3years.
- Getting Approval to construct the petrol station:
After the above listed document must have been submitted, inspection of the site will then be carried out.
“APPROVAL TO CONSTRUCT” will be granted by the Operation Controller/Manager (Department of
Petroleum Resources), if the proposed sites fulfill the conditions stipulated in the relevant sections of the
- Licensing procedure:
After the completion of the construction works, an application for a Storage and Sale License must be made to the Department of Petroleum Resources (DPR). Such a license is granted after the station has been inspected and certified as being satisfactory by official of the DPR.
The following facilities must be provided at the petrol station before it could be considered for licensing:
i.Air compressor and air gauge in good working conditions
ii.Provision of water (pipe-borne /well-treated borehole)
iv.Well-stocked first aid box
v.Refuse container/waste basket(s)
vi.Safety equipment or facilities
vii.Toilet facilities and conveniences
- Independent marketing/sponsorship:
All application for storage / sale licenses may be channeled through a sponsor company i.e. An oil marketing company with which the applicant has concluded product supply arrangements. Sponsor companies may be any of the following: NATIONAL, UNIPETROL, TOTAL, MOBIL, AFRICAN PETROLEUM (AP), ELF, AGIP, TEXACO, OR any of the existing independent Oil Marketing Companies. PETROLEUM PRODUCT MARKETING COMPANY (PPMC)/(NNPC) would enter into Petroleum Product Supply Agreement with a DPR Storage & Sale Licensee who intends to operate as an independent Marketer.
Important Things To Note:
DPR Standard practices For Petrol stations In Nigeria
- All Fuel pumps should accurately dispense and display volume and price.
2. Always make available alternative sources of power to operate products pumps and adequately illuminate of the station.
3. Display of current Storage and Sales License in the station’s office at all times.
4. Availability of DPR inspections log book in the station at all times.
5. Unrestricted access to DPR officials to carry out statutory functions in the station
DPR Safety Standards for Petrol Stations In Nigeria
- Functional firefighting gadgets must be kept handy and at strategic location within the petrol station..
2. A station manager/supervisor must always be at the station.
3. Pump attendants must be trained and dressed in appropriate safety gear.
4. Ensure that vehicle engines are switched off before fueling.
5. Strategic and conspicuous display of warning signs on “NO SMOKING and NO USE OF CELLPHONES” within the station.
6. Stations should always maintain good housekeeping.
7. Tanker trucks are earthed before starting (and throughout) products discharge.
8. A copy of every waybill for products on sale shall have to be available at the station at all times.
9. Petroleum Products in tanker trucks to be discharged into storage tanks must be allowed to settle for at least two (2) hours while in the station before its discharged.
In conclusion, I believe with all the information I have stated above, you have been inspired to take action in setting up your own Petrol filling station in Nigeria and make steady millions as profit.