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Best Guide on How To Start Cooking Gas Business in Nigeria
The oil and gas industry is the most lucrative business in Nigeria since crude oil was found. The oil and gas industry currently plays a huge role in the growth and development of Nigeria’s GDP. The only problem here is the huge funds required to start it. But in this post I will show you how to start cooking gas business in Nigeria, so make sure to read this post to the very end.
Depending on how you want to run your cooking gas business, will determine the amount of capital you’ll need to start up. This is because the business can be capital intensive.
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Is Cooking Gas Business a Profitable in Nigeria?
Globally, due to high rate of use of cooking gas in the homes and other sectors, Liquefied Petroleum Gas (LPG) market has propagated and attaining enormous growth. Furthermore, the adoption of LPG (Liquefied Petroleum Gas) has been globally approved by every country including Nigeria because of its low greenhouse effect.
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Who are your Target Markets
Liquefied Petroleum Gas is a thermal fuel, primarily used and consumed by industrial, commercial and household consumers. It is a fuel that burns cleanly with low emission of sulfur oxide which is not a pollution to the environment.
The major target markets are;
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- Industrial Customers: It serves as a source of heat where there is need for controlled temperature, i.e car industry, paint shops or even as fuel in other to lift trucks within warehouses, etc.
- Commercial Customers: These includes, for instance, a shopping center (Shop rite) consisting of a number of restaurants within it that may have one big tank of Liquefied Petroleum Gas reticulated to individual restaurants/stores.
- Household Customers: Liquefied Petroleum Gas is solely used in the household by customers for cooking and heating purposes. Recently, residential estates example (GRA) have also started installing this Liquefied Petroleum Gas reticulation system in other to supply gas to different properties within the estate.
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Methods on how to start cooking gas Business in Nigeria
The Wholesale Method: This method normally involves huge capital. You’ll need a land or good visible site to install your LPG storage Tank. Also this requires other Assets like Generators, Furniture, Buildings, etc. The best advantage of the wholesale method is that it enables you to serve all the target markets with ease.
And customers do prefer to refill their gas from Gas stations because it’s cheaper there.
A wholesale Liquefied Petroleum Gas site
The Retail Method: This type of business method only targets a specific niche in the market and that’s the household consumers. What you need here is just a shop, more LPG cylinders, an automatic weighing machine etc.
A typical example of an automatic gas refilling machine.
Below are the Steps on How to Start Cooking Gas Business in Nigeria
Starting a cooking gas requires an intensive capital for start up although it may vary depending on your business plan. And also the target market of your choice.
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Below are the steps in starting this Business;
- Acquire a land or Rent a shop
- Registration of Business
- Source for funds
- Buy a diesel Generator (e.g Mikano)
- Installation of Liquefied Petroleum Gas Storage Tank
- Gas supply Trucks
- Buy Pipes
- Purchase gas cylinder weighing scale
- Employ relevant staff
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Full Procedure On How to start Cooking Gas Business in Nigeria
Acquire a Land or Rent a shop:
Depending on your vision and business plan, you can go for 2 plots of land or more. This site should be big enough to accommodate all your business properties. Starting with the buildings, LPG storage tank, and also the site should easily identifiable.
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On the other hand, if your target market is of a particular niche, then you should rent a good shop so as to keep start up cost low.
Register your Business:
You’ll need to register your business with the Corporate Affairs Commission in Nigeria with about 10,000. Furthermore, endeavor to obtain your Tax Identification Number (TIN) and always file for tax returns to avoid Tax Officials harassment.
Source For Funds:
Make sure that you have enough funds before you embark into this business. If you don’t have enough fund, you can also obtain loans from your banks in Nigeria.
Buy a diesel Generator (e.g Mikano):
Because of Nigeria’s poor power supply, it is best for you to buy a good generator set that will supply electricity to your site.
Installation of Liquefied Petroleum Gas Storage Tank:
It is best to hire a specialist to do all the gas plant installation because gas products are highly inflammable. Therefore, the installation of the storage tank or gas plant needs a special care.
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Gas supply Trucks:
You should have gas trucks which will always be present for gas supply to your gas plant.
Employ Relevant Staff:
You need to employ some staff, train them and also pay them well so as to make them work harder. Try your best to keep good relationship with your staff especially the key ones and less useful ones, you should know what to do.
Conclusion:
Let me give you an estimate of what a Liquefied Petroleum Gas refilling station with everything will cost. Although it depends, but you should be looking at minimum N20 million to start up.
Then for retailer LPG refilling shop you will needing a minimum of N400,000. This is just the estimate of the amount for everything including the shop rent, Gas cylinders, and installation. So with all these detailed information I believe I have given you all you need to know on how to start cooking gas business in Nigeria.
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