By Adewale Sanyaolu
Nigeria is one of the biggest oil producing nations in the world with very huge crude oil deposits around the entire South South, South East, and South West regions of the country, both tapped and untapped. Everything about oil is money, from exploration to exportation and marketing (crude or refined products), etc.
Further to being an oil producing nation, Nigeria is also one of the biggest consumers of oil products in Africa with about 40 million litres said to be consumed everyday. Why not? All the millions of cars and trucks on the Nigerian roads run on PMS or AGO (petrol or diesel) everyday.
Almost every home in Nigeria has a generator that works sometimes all day to power our homes (I’m writing this article with my laptop powered by generator right now), and most of these millions of generators used in Nigeria run on petrol and diesel.
The factories, businesses, schools, hospitals, in fact, everything in Nigeria depends of power generated privately from petroleum products-consuming sets. And all these oil products are dispensed almost 100 per cent through fuel filling stations.
Therefore, if you can lay your hands on petrol filling station of your own to market all these products, you are in for money. The demands for oil related products are very high and suppliers seem not to be enough. Even the major oil marketers including Mobil, Total, Oando, Conoil and Forte Oil are always looking for individual (would be) marketers who have the needed finance and logistics that they can sponsor in this business.
Using the 2012 petroleum products pricing template as a case study, the commodity prices for these petroleum refined products are high, though the current template (2017) is much higher and that guarantees more profits for marketers. As at May 2012, the prices of petroleum products were: Petrol – N97 per litre; diesel – N150 per litre; and kerosene – N130 per litre
This means that in Nigeria where 40 million litres of petrol alone are said to be consumed daily, a total of N97 x 40,000,000 = N3,880,000,000 is spent on fuel daily by Nigerians!
Now let’s assume you buy a full tanker load of fuel with maximum load capacity of 30,000 litres. When the product is completely sold, which usually takes less than six days to sell (depending on where your fuel filling station is and the demand at that time), the cash returns expected from one tanker of each of the petrol products’ sale will be: One tanker of petrol = N2,910,000; one tanker of diesel = N4,500,000; and one tanker of kerosene = N3,900,000.
The expected profit return from the sale of these products = N3,200,000. This means that in a week or thereabout, if all the products are sold, you’ll be making profit of N3 million!
Your petrol station need not necessarily be in the city like Lagos, Abuja, Enugu or Port-Harcourt. It can be located in the rural area as these areas are always neglected by the major marketers who prefer the urban areas. Having your petrol filling station in the rural area is far less expensive to set up and to maintain and still guarantees sustainable profit.
Type of marketer
There are two types of petrol marketers: Dependent Marketers and Independent Marketers. Each of them has both advantages and disadvantages. You need to understand these very clearly before choosing which one to go for. You can only be one at a time except you have enough investment capital to build more than one fuel station – use one for franchise and the other for independent marketing.
Dependent marketer
You are a Dependent Marketer when you hold the franchise of a major oil marketer to market under its name with your own facility fully branded by them. You’ll need to be clear on what the advantages are as that will help you make proper decisions. In my own opinion, it seems the advantages of being a franchisee of a major marketer is more than the disadvantages.
Independent marketer
A petrol station owner who runs his business under his own name, buys products directly from the nigeria National Petroleum Corporation (NNPC) and has a representative and assistant representative at the Petroleum Products Marketing Company (PPMC) depot by NNPC.
•Building your petrol station
Carry out research and feasibility study about the business structure and the location you intend to situate your business. This is very important as it will help your decision-making and form part of your documentation.
Remember, you are making a huge investment, you need to carefully study your intended petrol filling station environment. After this, you proceed to get Approval to Construct.
Basically, your petrol filling station has to be along the major road so that passing vehicles can easily have access to the facility.
Closeness to a busy area like motor park, roundabout or market is a plus so that vehicles engaging in commercial activities in those areas can easily call in at your fuel station to have their tanks refilled.
If your intended location is by the double lanes expressway, make sure the proposed land for your petrol station is close to a u-turn or roundabout.
Land
Two plots measurement of land is the minimum property requirement to build your petrol filling station. This will be able to afford enough space for vehicles to queue and make exit turns.
Carefully negotiate price for good landed property, the prices vary from location to location; no specific price can be placed on that here. You will need to find that out using property agents.
Storage tank
After acquiring your property, do the documentation, carry out the proper land survey and structural design. The next thing is to sink the underground storage tank. These tanks vary in measurements: 30,000 litres, 35,000 litres, 40,000 litres, 45,000 litres and 60,000 litres,
It is recommended that you go for high volume tank, like the 45,000 and the 60,000 litres if you intend to be storing extra fuel. If you go for 30,000 litres underground tank and you intend to be lifting full tanker of 30,000 litres, then you will have to always wait until the last drop of fuel in that tank is sold before going for another turn.
Construction
The petrol station construction engineer will be able to handle that effectively.
A bungalow – how big or small is entirely your choice depending on the space available and what else you want to add. Do you want restaurant, supermarket and car wash? Then, you need bigger bungalow.
Canopy over your pumps – the shade constructed over petrol station pumps is called canopy. It protects the pumps and the petrol attendants against the sun and the rain.
Perimeter fence – it is a regulatory requirement to fence the three sides of your petrol filling station, leaving only the entrance open for entry and exit. If you’re on a T-Junction, only two sides would be required to be fenced, the rest two would remain open for easy entry and exit from both joining roads.
Hardcore flooring – vehicles of different sizes and capacity would be making entry into your petrol filling station when operational. Your floor must be hardcore concrete to resist the pressure from these vehicles.
Standby generator (25kva to 35kva and above) – one need not be told that power supply isn’t stable in this part of the world. As far as petrol station is concerned, power supply is nonstop throughout the day, even when the business is closed for the day. Besides, standby generator is one of the requirements for approval.
Three to six pumps (electronic) – you will need between three and six dispensing pumps, depending on the size and level of approval you get. After all these have been done, next is to get your license and approval; visit www.dpr.gov.ng
Staffing
Security – this should be number one on the list of staff because of the high security risk in the petrol station business due to the expected flow of cash. Security in this country, as you and I know, is a total mess. Until the cashless policy becomes fully operational and adopted by every individual, security will always be a top priority in this business.
Armed robbers prefer to attack late at night and during the weekends when they hope to meet plenty of cash. Prepare to battle them on all fronts, enlist the services of private security operatives and pay them well.
Make sure you won’t be leaving plenty of cash within your petrol station at all times, security or no security.
Attendants – you will need two petrol attendants for each pump, who would be running shifts between them, one person at a time. Multiply that by how many pumps you intend to have, that’s the number of attendants you need to employ.
Cashier – this person will be in charge of handling the cash and keeping records of the cash transactions. Employ an account and use functional efficient software to keep accurate record of you cash movements.
Supervisor – his duty is to go about making sure everything is in order, both the facility and the staff. He sees to it that everyone is up to his task and he/she reports back to the manager.
This person must be very reliable and proficient at what he does, must not be a compromising individual.
Manager – he is the superior in charge of the overall function of the petrol filling station and must be experienced with the running of oil business. Every other staff reports to him while he in turn is accountable to the Chief Executive Officer (CEO). Carefully chose this person, your business can be made or marred by him. We have seen managers run businesses down.
With everything stated above in place, you are 100 per cent ready for real business and good to go.