HOW TO BECOME A KEROSENE DISTRIBUTOR IN NIGERIA
How to become a kerosene distributor in Nigeria Kerosene is a widely used form of energy, as it serves a lot of purposes in households. This fuel is so popularly used by many that it is found across the urban and rural parts of the country. This is why kerosene is enriching the oil and gas investors. If you have decided to tap into this huge investment opportunity, but don’t know how to go about it, this post will walk you through a step by step guide on how to start up your own kerosene distribution business in Nigeria.
So if you’re ready, let go!
Now. Selling kerosene may sound simple, but the fact is there’s a whole lot more to it. You have to know where to get your product, the reliability of your source, licensing and many other things to be factored in your planning. It is for this reason that you need to go ahead and run a thorough research on everything from market survey to cost rates, your target customers, etc. Aside from getting typical information about the business, you will need to attach yourself with stakeholders in the oil and gas industry so as to learn the pros and cons of the business before you start supplying retailers around you.
You need a business plan
Typically, every business needs to have a well-written business plan before starting up, and for good reasons. It will serve as a guideline for the implementation of your business. It could also be used for the purpose of applying for a loan for your startup. And any well-prepared business plan will give you an edge when trying to secure other source of funding for your startup. No investor will stake their wealth on your business without proof of a business plan showing how you intend to run your business for profitability.
Like I said earlier, you will need to find means of assessing funds for your business. Kerosene distribution business is basically capital intensive and will require a huge amount of money to start up. You will need about N3,000,000-N5,000,000 to start. It’s easier if you already have that amount lying fallow in your bank account, otherwise, you will have to source for it, either through; applying for bank loans, applying for grants, borrowing from friends or relatives, from angel investors, etc. Whichever one works for you is just fine, provided you get the required funding to start up. Just make sure that you have a business plan handy in anticipation of investors for your business.
Get a haulage truck(s)
Since you want to become a large-scale supplier, you will need to get a 30,000, 33,000, or 45,000-liter truck size in place. This will cost you a huge sum of money, and that is why it is advisable to get your finances ready from the onset. However, if you do not have the required capital to purchase a truck or tanker from the start, you can always opt for leasing a truck.
Register your business name
Next on is having your business name registered with the Corporate Affairs Commission of Nigeria ( CAC). This way, you can easily operate your business as a legal entity; an entity separate from you. Getting your business registered with the CAC is not that big a deal, just visit any of their offices closer to you, or you could easily visit their official website at www.cac.gov.ng.com to download the application form.
Open a corporate account
For your business to function as a separate entity, you have to be able to effectively manage its financing; it is for this purpose that a current account is required for all your business transactions. Walk into any commercial bank of your choice and inquire about the procedure for opening a current account. Your business name will serve as the account name to ensure that you register your business name with the Corporate Affairs Commission.
Get Licenses and permits
For you to certified as a kerosene supplier, you have to register with the Department of Petroleum Resources (DPR) so as to obtain the peddler’s license requirements. Also, you will be required to register your truck driver with the PTD (Petroleum Tanker Drivers), which is a sub-division of NUPENG (National Union of Petroleum and Gas Workers). To obtain the necessary licenses you need a tax clearance, VAT certificate, a sponsor, and your certificate of incorporation.
Once you have obtained the DPR peddler’s permit, you can then proceed to register with the Kerosene Peddler’s Union. All these processes and licenses are important so as to avoid your truck getting impounded.
How to register your truck
Note that your truck has to be registered with the Department of Petroleum Resources (DPR) to avoid any risks of getting impounded.
If you don’t have sufficient cash to buy a truck outright and have chosen to lease a truck, you have to immediately get a lawyer to review the lease agreement properly. Reach out to an oil and gas consultant or anyone experienced in this business to help you crosscheck the truck details properly before you proceed to have it registered.
So, what are the details you should look out for to register your truck?
- Calibration meter
- Transporter’s name (i.e. your business name), etc.
All of these (and others that will be specified) will be required for registration with the DPR.
Buying your kerosene products
So once you’re successful finished all the registration processes, you can then take your truck and money to any of the depots where they sell kerosene products to buy your product for immediate business. You can choose to get your products from independent marketers, NNPC terminals, or PPMC terminals.
List of some kerosene depots in Nigeria
- Kaduna depot, Kaduna
- Suleja depot, Suleja
- Minna depot, Minna
- Kano depot, Kano
- Makurdi depot , Makurdi
- Maiduguri depot, Maiduguri
- Gombe depot, Gombe
- Satellite depot, Ejigbo, Lagos
- Mosimi depot, Shagamu
- Ibadan depot, Ibadan
- Ore depot, Ore Ondo Gate
- Ilorin depot, Ilorin
- Benin depot, Benin city
- Warri depot, Warri( Refineries)
- Port Harcourt depot, P.H.C ( Refineries)
- Owerri depot, Owerri
- Enugu depot, Enugu
When it comes to supplying kerosene, you make your profits from the volume supplied. You can achieve this through regularity of supplies. Target lifting five to six truckloads of kerosene or more per week. And you’re welcome to the gold in kerosene distribution business.
Generally, kerosene business boasts of a 100 percent return on investment, so what are you waiting for?
If you need more information or would like to book a consulting session with us, you can call us on 08105636015 or 08076359735. Alternatively, you can send a mail to email@example.com