How to Start Kerosene Business in Nigeria - Complete Guide!

Kerosene is one of the most essential petroleum product in Nigeria and is used extensively in both rural and urban areas. Almost every home makes use Kerosene in Nigeria in one way or the other, thats why people always experience hardship whenever it goes scarce.

Kerosene is equally one of the petroleum product in Nigeria that make huge money for the oil and gas entrepreneurs. People are said to be making millions of naira in the business everyday and from my findings, I can tell you it is a business that worth investing into. It is so lucrative that you can make your entire investment capital back from your first sales!


Kerosene-Lamp-Lighting-at-Night
Kerosene Lamp Lighting at Night

Why is Kerosene business in Nigeria very lucrative?

One basic reason for the profitability of Kerosene is the high demand for the product caused by the very high population of low income earners in Nigeria. 11,000,000 litres of Kerosene is said to be consumed everyday and the demand can only get higher due the ever increase in population.

Another reason is lack of proper supply of electricity in Nigeria. Most homes depend heavily on Kerosene for their cooking and other home energy related purposes and simply can not do with the product.

Because it is a product that is in high demand, dealer in Kerosene make quick sales and return back for another round of supply. The result is that they make more and more profit as the around trips continues.

The disparity in the product pricing is probably the biggest reason why Kerosene business is very lucrative. Most people are ignorant of the real official price of DPK but the dealers knows exactly and are cashing on peoples ignorance to make huge profit even if it is unjustified. 

Kerosene is officially sold at N50 by the NNPC. From NNPC you can land the product at unit cost of N50 per litre and sell for N100 per litre.

All you need to do is to know your way, that is what filling station owners and other dealers do. Though I don't support sharp practices and taking advantage of peoples ignorance but that isn't my duty to control, it is the duty of the Government and the price regulatory body.

If you lift 10,000 litres of Herosene from the NNPC or other major dealers like the Capital Oil, sell for 100 and gain at least N50 per litre, you will gain N50 x 10,000 = N500,000. A dealer confirmed that they make N1,900,000 profit from 33,000 litres of Kerosene.


What you need to get into this business



Kerosene business is one of the easiest business to start and the capital requirement is very very minimal compared to other oil and gas related businesses. Everything put together may not cost more than N700,000 at most N1,000,000 depending on the level you want to start from.

Here are some of the things you need to get you started as soon as you can

1. Business Location - Since the sale will be from the surface tank, you will need a business place or location where you can put your tank.

Any place where there is reasonable population of people is ideal for the business. It could just be in front of your resident or the nearest major road side. If it is in front of your resident, you wouldn't need to spend extra money for the rent.

In which ever way, you may just budget N30,000 at most for that. In some cases, you may even get it for free depending on who you know.

2. Surface Tank - The Welders will construct a very good surface tank for you. Look for a very good welder that is not far from the proposed business location to ease the cost of transporting the tank. Construct 10,000 litres volume tank but let them make it 10,500 litres to be able to accommodate all your Kerosene.

You can do 15,000 litres if you want. It wouldn't cost you more than N100,000. Make sure it is properly welded to avoid leakage. Coat the inside and outside against rust, the welder will do that as well.

3. Source Your Kerosene
- Independent Marketers controls more than 60% of Kerosene sales, while NNPC controls maybe 40% of the sales through the Pipeline and Product Marketing Company, a subsidiary of NNPC. You can buy directly from the source. I am seeking for additional information how you can get it from there and will update here very soon.



Kerosene-Queue-Nigeria
One of the Numerous Kerosene Queue in Nigeria

You can get the product from other Independent marketers, Capital Oil Ltd and the rest. There are other countless sources where you can buy Kerosene but beware of adulterated product. You may be arrested if the Kerosene get exploded in peoples home.  
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32 comments:

  1. Hello Darlington,
    Thank you for the info. Very useful indeed. I have a cousin who wants to go into the kerosene business but has only 200,000 naira. Can she start anything with such an amount?

    ReplyDelete
    Replies
    1. Sure he will even with less than that. You can start with what you have, then as your profit comes, you reinvest it until you get big.

      Delete
  2. What about government regulations

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  3. can one get a marketer who you can form partnership with? may be buying on credit and paying after sales.

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  4. what about government regulations

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  5. Pls how can i get a good supplier, with good price

    ReplyDelete
  6. do i need to be licensed to distribute kerosine on a wholesale/retail level? how do i source for the product? how do i test for adultrated and original kerosine?

    ReplyDelete
    Replies
    1. No, not needed any license to sell kerosene with surface thank by the road side. By from NNPC or Capital Oil

      Delete
  7. Sorry but my enquiries got me to know that you require DPR license to sell by the road side and that your surface tank should not be more than 5000ltrs. Speaking of dealing directly with capital oil or NNPC for 10000ltrs, the possibility of that happening is....

    ReplyDelete
  8. ...To get 10000ltrs of kerosene from NNPC is a pipe dream as the minimum you can get is 300000ltrs.

    ReplyDelete
  9. You will need a DPR Peddler's permit/License if you are supplying or retailing in large quantity and register with the Kerosene Peddler's Union probably. The reason is in case of scarcity, that DPR would take you as kerosene hoarder. I will write full article of this soon.

    ReplyDelete
  10. i read in one of ur articles earlier dat u dont need a license to do below 10,000litres, and u ar talking about being taken as a hoarder here. pls explain. do one need license or nt?

    ReplyDelete
  11. tanx for the info, but i really want to know how to buy product directly from the company. do i need a license to start, and how much to hold to start buy from the company.

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  12. pls wat is d procedure if sm1 wnt 2 start with btw 200 and 300k

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  13. thank so much for this wonderful information,
    I have seen a location but its inside a market that functions every 4 days, Is this place a good location?
    and i went to sort out price to construct 15000 ltr, i was told its #300,000

    ReplyDelete
    Replies
    1. Location in the market is good but N300,000 is very high for the tank construction. Try to get better bargain elsewhere.

      Delete
    2. I have a tough steel surface of over 1000lt capacity for 100000k

      Delete
  14. Good day Darlington, I would like to have a full business plan of a 30,000 Litre kerosene tank business to be situated in Ebonyi state.A good business plan is the major requirement for me to obtain capital/loan from an investor for this business.I really need your help in this as the deadline for the loan procurement is in a week's time.I would be looking forward to hearing from you soon!...Thank you

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  15. Good day darlington, pls how can i get the nnpc's contact so that they could supply me the kerosene in my area?

    ReplyDelete
  16. Good day Mr Darlington, am a student so am left with the thought of CAN I START THE KEROSENE BUSINESS WHILE IN SCHOOL. Can it be monitored by an hired staff.

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  17. Pls Darlinton Omeh, what's d current price of kerosene frm major dealers/NNPC?

    ReplyDelete
  18. Darlinton do u know how long kerosine can be stored? I mean does kerosine expire after so many years.. I want to store some kerosine and travel, then when i return, i wil start selling

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  19. justice, please mr darlinton how do i get my licence for kerosene

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  20. Good morning Mr Darlinton. I love what you've done for us.
    I need to you to help me with the major details on how to get this product from either Capital Oil Ltd or NNPC.
    I'm a young undergraduate that seek to Develop. The Competition in the buyer's market is not a threat. I can stand the heat.
    All I want is the procedure to get the product. I reside in Abuja. Capital Oil Ltd is sited in Lagos.
    Educate me on how to get the product from the company

    ReplyDelete
  21. Good day I will like you to shed more light on this business,I have already started though with 1 drum.I intend to go further and I need to know the dos and donts in the business.thank you.

    ReplyDelete
  22. I want to ask how much the HANDPUMP is sold?

    ReplyDelete
  23. please DARLINTON OMEH i want to start the kerosene business with a 33,000 liter truck and 33,000 liter surface tank what procedures do i need to get i made some enquirers with DPR and they said i cant have more than 5,000 liters

    ReplyDelete
    Replies
    1. You can't store 33,000 litre at once in your compound or business premises. Remember that 33,000 little is equivalent to full load of 18 tires trailer tanker? That will be too much to store at once. Get it bit by bit (5,000) each, except you want to sell it from the tanker.

      Delete
  24. Hello please i want to start the kerosene retail business with 5000 litres, how do i get it directly from the source and do i have to get license froem DPR

    ReplyDelete
  25. i WANT TO SELL FROM TANKER, PLEASE WHAT IS THE PROCEDURE? THANKS

    ReplyDelete
  26. What is d current price of DPR from nNPC as at today

    ReplyDelete

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