Are you looking for how to start a cooking gas business in Nigeria? This is a complete guide on how to start a cooking gas business in Nigeria whether a large-scale (gas station) or retail business.
Is LPG/Cooking Gas profitable in Nigeria?
Cooking gas which is also known as Liquefied Petroleum Gas has become the norm for cooking these days. Many have abandoned the use of kerosene for gas as it is faster and easier for cooking than the latter.
It is not surprising to see business owners who are selling these gases making a lot of profits because of its huge demand. With the right strategies and good location, Cooking has business in Nigeria is profitable.
You can make as high as N100,000 or more profit monthly depending on your patronage. Fortunately, operating a cooking gas does not require much capital especially if you are venturing into the retail size. And of course, running a large-scale gas station means the profits will increase extensively.
Now that you have realized how profitable an LPG cooking gas business can be in Nigeria. Below are the steps required to run a successful cooking gas refilling business in Nigeria.
Steps to Set up a Cooking Gas Business in Nigeria
Whether you are looking to start a gas station in Nigeria or you prefer the cooking gas retail business, the below steps are what is required of you.
1. Adequate Knowledge/ Research
In every business, there is always a place for skills, knowledge, and research. Not excluding the cooking gas refilling business in Nigeria, you need to have basic knowledge of it.
As little as knowing how to refill gas, how to identify cylinder and what to do to leaking gas and so on are important knowledge in running a gas station or cooking gas retail business in Nigeria.
There are a lot of risks associated with selling Liquefied Petroleum Gas. Thus, you must have an in-depth knowledge of the risk and how to prevent it. Ensure you are familiar with all the safety precautions and other necessary skills.
Also, you need to make research on the requirements of obtaining a license if you intend to run has to station. Locations, target audience, equipment, and other information are also part of what you need to research on.
To start a cooking gas station in Nigeria, you will need between N10 to N20 million. This is because of many responsibilities like land, license, machine, and other equipment that comes with it. You may take loans or seek funds from banks, NGOs, family, or friends to start your cooking gas business.
In case you want to start a cooking gas retail business in Nigeria, your capital won’t be up to that. Depending on your preference and location, you may need N150,0000 to N200,000 to get started. It is always good to start from scratch and grow later on, instead of not doing anything. You can start with what you have and grows into a cooking gas station later on.
Read Also: How to Qualify for an SBA Loan in 2021
For a large-scale cooking gas refilling business in Nigeria, you will need to get suitable land for your gas station. According to the Department of Petrol Resources (DPR), all gas stations must be 15m away from flammable materials and should not be close to any residential building or filling stations. So, when buying land for your gas station, you should follow this instruction for your business to be licensed by the DPR.
Similarly, for those planning to run a cooking gas retail business, you need to rent a good shop for your business. Although your shop must be near and between residential buildings. You need to ensure this to witness tons of patronage. Also, you should ensure the space is spacious and safety precautions are instituted. Avoid areas that are dominant with cooking gas retailer businesses to avoid competing for customers.
4. Equipment and Tools
Equipment and Tools are also very important in setting up a successful cooking gas business. You need to buy the appropriate equipment like testing pool, electronic scale, mechanical scale, hose, burner, regulators, and so on.
You should know that the equipment that is required to set up a large-scale gas station is different from that of the cooking gas retail business. That is why we advised earlier that you have adequate knowledge of the business before starting it.
If you intend to run a gas station in Nigeria, then you must apply for registration and licensing under the Department of Petrol Resources. After meeting all the requirements, you can then invite the organization for assessment before you will be given a license. You can visit the DPR website or office for more information about their terms and conditions.
Some of the Permits required by the DPR to grant license include;
- Police Report
- Town Planning Permit
- Fire Planning Approval
- State Land and Physical Planning Permit
Also, running a large-scale cooking gas refilling business in Nigeria requires you to register with the CAC. The Corporation Affairs Commission is in charge of registering genuine businesses with the government of Nigeria. You may also be required to join different associations for your business if there are any.
Note: If you are running a cooking gas retail business, you do not need any registration or licensing. It is only applicable to those starting a large-scale cooking gas business in Nigeria.
No doubt, the cooking gas business is a risky business with a lot of profits. It is always better to be prepared for the worst in this business as there have been cases of explosions and other bad incidents in gas stations.
Thus, we advise you to ensure your business especially if it is a gas station to avoid total loss in case of any unforeseen circumstances.
7. Advertising and Promotion
Advertising and promotion are some of the important steps needed to set up a successful cooking gas business in Nigeria. Depending on the size of your business, you can leverage word of mouth marketing, referral marketing, social media marketing, posters, flyers, signboards, and so on.
Setting Up a Successful Cooking Gas Business in Nigeria
The cooking gas business in Nigeria is no doubt risky but very profitable. It requires a lot of skills, knowledge, effort, and time. With this guide, the right strategy and efforts, setting up a successful cooking gas business in Nigeria is plausible. We wish you success in it!