How to start a Kerosene Retailer business as a fresh Graduate

 

 

Do you want to do business in the oil and gas industry? Are you interested in starting a kerosene supply and retail business? Then below is a sample kerosene retail / supply business plan template.

Because it is used in virtually every home in Nigeria, kerosene is one of the fastest selling petroleum products in the country. And the story is the same in most other developing countries with erratic power supply.
In many third-world countries, kerosene (DPK or Dual Purpose Kerosene) is used extensively in both rural and urban areas for domestic purposes such as cooking, lighting kerosene-powered lanterns, and burning refuse. This explains why it fetches huge profits for oil and gas entrepreneurs in Nigeria and beyond.
Kerosene supply is a very lucrative business that can make you a millionaire within a couple of months; provided you run the business in Nigeria or in another country with similarly huge demand for the commodity. In fact, some entrepreneurs in these countries revealed that they realized all of their capital after the first 2 to 3 sales! Yes, the business is that lucrative.

2 Reasons why you should start a Kerosene retail business

• Firstly, Nigeria (and other countries where kerosene is in huge demand) lacks stable electric power supply. And this explains why most people depend heavily on kerosene for cooking and other domestic purposes.
• Secondly, Nigeria has a large population, comprising majorly of low income earners who buy kerosene because they simply cannot afford costlier energy sources. So, the market for kerosene in Nigeria (and many other countries in Africa) is very large for everybody to explore.                                                                                                                       How to Start a Kerosene Retail (Mini Depot) Business – Sample    business Plan Template
• 1. Find a good location
  To succeed in the kerosene retail business, you need to be strategically located. A good place to site your mini kerosene depot is within residential areas with high population density. Of course, it will be preferable if majority of the residents are middle or low income earners as they are the ones that purchase kerosene more. Research shows that high income earners prefer cooking gas to kerosene.
  Since you will be selling kerosene using a surface tank, you will need space large enough to accommodate one. If you have some space right in front of your home, then that would be just fine; since you won’t spend extra costs on rent. But if you don’t, you will have to pay rental fees either monthly or annually.
  2. Register with the appropriate body or agency
  Before you can start kerosene retail business, you will need to register with the specific regulatory body for kerosene sellers in your state or country. This body will then issue you a license and let you know the rules and regulations that bind selling kerosene.
  Examples of such bodies are NUPENG (National  Union of Petroleum and Gas Workers), DPR (Department of Petroleum Resources), and the Kerosene Retailers Association. To obtain the necessary licenses, you need a tax clearance, VAT certificate, a sponsor and your certificate of incorporation.
  In Nigeria, the regulatory body for kerosene requires that your surface tank must be placed at no less than 200 meters from that of another kerosene dealer. This is to avoid stiff competition. Also, the body requires that surface tanks be painted blue and taped with white lines in the middle. This is to indicate that the tanks are used for storing kerosene and not another commodity.
  3. Construct a surface tank
  To get surface tank, you can approach a welder to help you construct a very good surface tank. You may also decide to buy an already built tank, this can be either new or fairly used. The cost of a surface tank depends on the capacity. You can decide to start with either a 5,000 or 10,000-capacity tank.
  You must ensure that the tank is well painted on both the exterior and interior to avoid rusting. And make sure the welding is properly done to prevent leakage. It is also important that your tank quality meets the minimum specification, as petroleum task force officials regularly conduct inspections and checks.
  4. Arrange with suppliers
  While most of the kerosene sales in Nigeria are controlled by independent marketers of petroleum products, the Nigeria National Petroleum Corporation (NNPC) also controls up to 40% of kerosene sales in the country. This means that as a Nigerian marketer, supplier or retailer have two options to source your kerosene from.
  You can either buy from the NNPC mega-stations sprinkled all over Nigeria or from any of the independent marketers. If you are not based in Nigeria, you may need to find out how kerosene is supplied in your country.
  5. Launch your business
  You can design a signboard or placard and position it near your tank. This will make people aware that you are selling kerosene. To attract customers, you may need to offer attractive discounts or bonuses at first. However, I want to point out that most kerosene retailers in Nigeria don’t advertise. Why? The reason is because there is always a steady supply of customers.
            But in case you don't have the cash to start big there is always the opportunity to start small.
  
  The following steps  will help you grow your kerosene business quickly from small scale to large scale:
  
  
  Step1: Start with whatever you have.
  
  
  Step2: If you don’t have money enough to buy a surface tanker drums, buy plastic kegs. But the trick to grow your kerosene business fast is to start with a few plastic kegs, to see how well your patronage is before you buy either a drum or a surface tanker for the purpose of more litres of kerosene.
  
  
  Step3: Buy funnels, Jerry-cans, hose, etc.
  
  
  Step4: Look to choose where there is dense population in good-home environment, to set up a business there in front of passerby on the road or in the street.
  
  
  Step5: Go get cheap kerosene from NUPENG at Mushin, Lagos-Ibadan express if you are in Nigeria. Or ask people where where you can get cheap kerosene.
  
  
  Step6: Tell them how many litres you want to buy. I offer you to start 500 or 1000 litres, but you decide what litres you want to.
  
  
  Step7: Then sell people at affordable price. Don’t sell at hiking price if you want fast profit margin daily, or if you want your business to grow fast daily.
  Step 8: Remember about a jerry-can you should measure carefully because the measurement of jerry-can is not right even when you think it is right. For example, the 20 litre jerry can be actually about 25 litres when you fill to the brim and the 10 litre jerry can be actually 12.5 litre. 
  So you have to be so careful about the jerry can. It can be applied same to all sizes. Remember about the transport cost of kerosene for your destination you need to add a charge on each litre you sell so that you can avoid losing your profit. 
  Step 9: Replace daily what you sell till your business grows strongly. Remember only record each time you sell and buy because it will help you to compare what you spend and sell. If your profit you sell is higher than what you spend, it show it is good, but if your profit you sell is less than what you spend, it shows how poor you control or you may mistake. 
  With sale record transaction daily, your kerosene business will grow fast. It will help you to monitor between the profit margin and lose in your balance.  
  Any comment or add, you are welcome to this comment box below.