There are major changes in the consumption of propane gas in Nigeria. Although many will like to make use of electricity but the lack of it begs for the use of other alternatives. Many now see the usefulness and convenience of the gas as a substitute for kerosene. Gas is non – arguably a better alternative to kerosene because it cooks food faster and is also cheaper. A recent study shows that Nigeria consumes 110,000MT of cooking gas per annum. Gas is now an essential commodity and is a business worth delving into. Even in times of recession, petroleum products do not run at a loss, more so fuel used for cooking, since people will always eat and cook.
Gas Business in Nigeria: How to Get Started
Are you are an investor or one who simply wants to go into business, cooking gas business is one you should consider. This article provides information on gas business in Nigeria and all you need to know in order to get started and thrive.
Propane Gas is not like every other consumable product, such as raw food. There are a number of things that would have to be put into consideration before you can start this business in Nigeria.
Factors to consider in order to start a Gas Business in Nigeria
Feasibility Studies and Market Survey
Any new business you want to get into requires that you conduct a feasibility study and market survey. A feasibility study enables you to make good decision regarding the business and gives you insight such as the most suitable locations to set up your business, likely competitions, estimated cost and start-up capital needed for the business, the kind of training needed to be able to manage the business effectively and other things needed to set up and manage the business.
Land or office facility
Every business that sells a product needs space to function. However, in the case of the business of distributing cooking gas, the aspect of the land is even more crucial. This is because of the environmental and health implications and safety required because of the cooking gas. One of the establishments which regulate a business that has to do with petroleum products is the Department of Petroleum Resources. In accordance with the stipulations and requirements of the DPR (Department of Petroleum Resources), the plant must be situated at least 15 meters from any building containing flammable materials. This includes residential buildings etc. Your location must be considered safe when the DPR comes for inspection and can be checked by a hydraulic cylinder maintenance technician. This is one of the first passes you must have before your application can be approved by DPR.
Register a Business Name
It is important that you choose a business name that is attractive for your cooking gas business. This business name must also be legally registered with the corporate affairs commissions in Nigeria.
It is also important that you separate your business from yourself. Hence, the more reason why you need to register a business name. This would give the business a face and a brand name.
Apart from supplying cooking gas to homes and residences, you can also supply cooking gas to organizations, hotels, schools, big clubs, restaurants etc. Many of these big organizations would not want to do business with you if they see that your business is not registered or corporate enough. Registering your business name sets you apart from just any roadside kind of business and would also make future clients consider you serious and one they can work with.
Capital and Labour
There is no business that you wouldn’t need capital and you would need a lot of this in order to start your cooking gas business. Capital is needed to buy all the equipment needed. Capital is also one of the pre-requisite that the DPR would look out for.
Purchase the Needed Equipment and Business Tools
Some of the equipment and tools you will need in order to start your cooking gas distribution business are:
- Empty gas cylinders
- Rubber gas pipes
- Gas regulators
- Weighing machine
- Delivery van or a bike for transportation
Other equipments include
- The testing pool
- Valve screwing
- Electronic carousel
- Mechanic carousel
- Electronic scale
- Mechanic scale etc.
You would also need to employ capable hands to help you run the business as the business expands and grows. These are prerequisites that the DPR would ask for, but asides this, you cannot function without this equipment.
License
This is another crucial prerequisite which is peculiar to the Nigerian situation as the requirements are based on the stipulations by the DPR. Note: The best and most accurate way to have all the information at hand is by visiting the DPR. You can also obtain a copy of the procedure and conditions for the issuance of the license by the DPR online. This would help you have more detailed information.
You will be required to have these permits in order to set up a cooking gas business in Nigeria:
- Police Report
- Town Planning Permit
- Fire Planning Approval
- State Land and Physical Planning Permit
- Department of Petroleum Resources License
Apart from the above, you would also need documentation to process the state L&P and the DPR permits:
- Environmental Impact Assessment
- Architectural Drawing
- Structural Drawing
- Mechanical Drawing
- Electrical Drawing
Marketing and distribution strategy
Every business thrives with a good marketing and distribution strategy. Ensure you take time to map out a good marketing strategy. Your topmost business strategy is setting up the business in a strategic, easily accessible location wherein your product is in high demand.
If your cooking gas business is well situated, the business will struggle less at the beginning. You can make use of handbills with attractive advertorial contents, online and social media. You can also make use of the word of mouth advertisement in order to inform people about your business and attract customers.
These are the steps to take in order to begin your gas business in Nigeria.