A Standard Blueprint on Kerosene Business
Have you thought of beginning a kerosene business in your vicinity with the intentions of catering for the kerosene needs of the locals and organizations? Then, read on! Kerosene is a is peculiar and perhaps, the most basic of all petroleum products in Nigeria and is utilized broadly in both the rural and urban areas of the country. Practically every home makes use of Kerosene in Nigeria in one way or the other. This is the reason why a lot of persons encounter some form of discomfort whenever there is kerosene price hike or scarcity.
As I mentioned earlier, Kerosene is agreeably one of the petroleum products in Nigeria that has huge profit potentials in the oil and gas business line. Individuals and corporate organizations are said to be making huge Returns on Investment (R.O.I) in the business. From my recent discovery, I can confidently disclose to you that this is one lucrative you will hardly lose a dime if you know the what you need to know about the business.
Why Is Kerosene Business in Nigeria Very Lucrative?
One fundamental purpose behind the lucrativeness of Kerosene is the popularity of the item caused by the high population density and the low salary scheme across entire Nigeria workforce. 11,000,000 litres of Kerosene is said to be consumed per day and the demand can even get higher due to the ever-increasing upsurge in population density in the country.
Another reason is the absence of appropriate supply of power in Nigeria. Most homes depend intensely on Kerosene for their cooking and other home vitality related purposes and hence, just cannot do without the item.
Since it is an item that is in popular demand, dealers in Kerosene make juicy deals and would quickly return back for another round of supply. The outcome is that they make a continuous return on investment from the business
Kerosene is formally sold at N50 by the NNPC. From NNPC you can decide to give out the product at a unit cost of N50 per litre and hence sell it for N100 per litre.
So, if you purchase 10,000 litres of Kerosene from the NNPC or other marketers like ConOil, Capital Oil etc., and sale for 100 for a litre, you will have made N50 x 10,000 = N500,000. A marketer once affirmed that he makes N1,900,000 profits from 33,000 litres of Kerosene.
What You Need To Get Into Kerosene Business
Kerosene business is one of the least demanding business to begin and the capital requirement is extremely negligible when compared with other oil and gas related businesses. Everything set up together may not cost more than N700,000, or at most N1,000,000 depending on the level that you want to begin your kerosene business from.
Here are the things you need:
1. Business Location
Since the business will be run from a surface tank, you will require a business place or area where you can put your tank.
Wherever there is sensible population upsurge is perfect for the business. In the event that your business premises is where you live, you wouldn’t have to spend additional cash for the lease.
Most times, you don’t have to pay for space, if you know people and have connections.
2. Surface Tank
Get a Welder to construct a decent surface tank for you. Search for a decent welder that is not a located too far away from the proposed business area to cut the cost of transporting the tank after construction. For a 10,000 litres volume tank, let the welder make 10,500 litres to have the capacity to contain all your Kerosene and even leave enough room.
Ensure it is appropriately welded to avoid any form of spillage. Coat within and outside against rust. That is part of the welder job, of course.
3. Source For Your Kerosene
Independent Marketers controls over 60% of Kerosene deals, while NNPC controls possibly 40% of the deals through the Pipeline and Product Marketing Company, an auxiliary of NNPC. You can purchase straight from the source.
Be careful where you buy from so as not to fall a victim of adulterated kerosene. Law enforcement may follow if caught defaulting.
4. Hire a Sales Attendant
Being that yours is a business which continuously feeds the local environment, and as you know, people need to cook daily with kerosene, you have to either be effectively present throughout the day in your workplace or employ a sales attendant with basic accounting knowledge to take care of your customers and handle the business operations every day.
5. Have An Idea Of The Business
A decent learning of market procedures suited to the area of your business is additionally an absolute necessity. A few people suggest a type of mentorship or temporary job for a sometime before one starts this business. With this, he/she would be able to have a significant knowledge of the underpinning of the market, make significant reviews and also incise thoughts that will help mould his own business effectively.
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7. Measuring Units
You require a type of measuring unit and system which is uniform. Of course, there are many types of measuring units in Kerosene Business. Ensure, however, that your measures are exact and that you don’t participate in sharp practices that may deny your customers value for their money. In a few areas, kerosene is sold per litre, while some offer to utilize bottles as their standard measure and offering units, for example, full jug, half jug et cetera.
It has been anticipated that you can make a gain of N10 – N50 on every litre of Kerosene you sell and overwhelming significant profits in times of shortage. In December 2016, there was a shortage of kerosene the country over; it was sold for as high as N250 per litre and retailers exchanged at about N300 per litre.
Likewise as with any other type of business, the sales of kerosene has its own dangers and difficulties, in any case, if you put hard work, commitment and devotion into your business, creating techniques that put you in front of your rivals in the business, you are assured of great success and nothing less.