Nigeria is the sixth-largest crude oil exporter in the world. This makes the country one of the best places to get into the oil business as it has many comparative advantages over other oil-producing African countries. Nigeria has been a major location for foreign investments and gas activities. Many opportunities abound in the Nigerian oil and gas industry, these include distribution, storage, and marketing of oil products. An oil marketer will get to deliver oil products to factories, workshops, eateries, government offices, filling stations, banks, cafes, and even homes. This article provides information on how to become an Oil Marketer in Nigeria.
Read on below:
Operating with a Local Purchase Order
With a Local Purchase Order (LPO), you can start your oil marketing business without any capital and still make huge profits. A Local Purchase Order is a contract between you and the company in need of oil products. The contract will entail such details as the date of product delivery, terms of payment, quantity and quality. A marketer with a Local Purchase Order will only need to arrange how the product reaches the customer and then get paid instantly. In other words, you will act as an agent between the petroleum companies and the customer company. Usually, the petroleum companies are the ones to process the paperwork and certificate needed to carry out this oil marketing business. Many oil marketers with a Local Purchase Order operate in small offices where you can meet them for business.
If you are looking to work as an independent oil marketer in Nigeria, these are steps to take to become an oil marketer in Nigeria.
Decide on what services you want to offer
The oil and gas sector is a multidivisional one with different downstream businesses that you can get involved with. These services include
- Owning a Filling station
- Marketing and retailing of Lubricants
- Cooking gas supply
- Diesel supply
As an entrepreneur, you can decide to focus on one aspect of oil marketing and expand your services as the company grows.
Develop a business plan
After deciding on the services you want to offer, the next important step is to develop a business plan for your oil marketing business. A business plan will help you plan ahead of challenges and difficulties you will encounter in your business. A business plan entails the resources needed to start the business such as the equipment, finances and other important elements. A proper business plan will include the following:
- Business Overview
- Competitive advantages
- Market Overview: The Opportunity & Solution
- Competition
- Source of Capital
- Location of business
Registration with the Corporate Affairs Commission
It is extremely important that you register your business with Corporate Affairs Commission (CAC) to avoid problems with the law. The cost of registration with the Corporate Affairs Commission depends on the type and size of the oil marketing business you are venturing into. Registering your business offers you more recognition and the opportunity to seal a business deal with the government and big organizations.
Acquiring a land space
After registration of your business name, the next step to take is to acquire a land space for the oil marketing business. This is especially needed if you are going for petroleum distribution. The location of your business must be in a commercial area that is easily accessible to consumers who need to patronize you and also attracts heavy traffic.
Surveying Land
You will need the services of a surveyor to properly check to make sure the land is fit and proper for building a filling station.
Obtaining a fire certificate
Every oil marketing company must have a fire certificate before operation can commence. You can obtain a fire certificate from the state fire service at your location
Obtain a letter of approval
A letter of approval is given by the state planning authority in the state of operation. A letter of approval is required before the construction of a filling station and before operations can begin.
Obtaining a police report
You can obtain a Police report from any police station in your location of business. A police report is required to prove that your business will not cause any traffic hazard to the citizens.
Obtain a tax clearance certificate
Obtain a tax clearance certificate from the State Inland Revenue service at the location of your company
Obtain a Department of Petroleum Resources (DPR) permit
A DPR permit is issued by the Department of Petroleum Resources (DPR) in the state where your company will be situated. The department is also in charge of issuing other relevant documents needed for the construction of an oil marketing company. The DPR permit takes 4-14 days to be processed.
Below are the documents required to obtain a DPR permit:
- An incorporated company
- Tax clearance of three {3} years
- Certified True Copy {CTC} of your article
- Memorandum of association
- Site Survey of the station
- Survey Plan
- Pressure test certificate
- A police report of traffic hazard
- Fire and safety report
- Building Plan
- Certificate of occupancy / customary right of occupancy.
With these documents and an application letter, you can now apply for inspection of the proposed site to the department of petroleum resources.
Obtain a lifting right and bulk purchase agreement
After you have been issued the Department of Petroleum Resources (DPR) storage license, you will need to pay a visit to Petroleum Pipeline Marketing Company (PPMC) in order to get a lifting right and bulk purchase agreement. This document permits you to engage in marketing petroleum products as a wholesaler.
Depot allocation
The final step before you can start operations of your oil marketing business is depot allocation. Depot allocation enables you to lift petroleum products from the closest Nigeria National Petroleum Corporation (NNPC)
Market and Brand your company
It is important to your brand and markets your oil marketing company by networking with companies and organizations that will need your service. You can place adverts on billboards and tell your existing customers to make referrals on your behalf.
Hire and train employees
As your oil marketing company continues to grow, you will need to hire employees to handle various aspects of the business. Your employees are a determining factor in the success of your business. Ensure you train these ones well in various areas such as customer service relations, accounting, etc.