How to set-up a mini cooking gas plant

Cooking gas refill business is very profitable. Before starting a cooking gas business, you will need to purchase gas cylinders, regulators, hoses, and other equipment necessary for storing and dispensing gas. It is important to ensure that the equipment you purchase meets safety standards and regulations set by the relevant authorities

Today, Nigeria consumes about 250, 000MT per annum and we have about 230 LPG refilling plants and 7,000 retailing outlets.  More succinctly, a captive market of over 180 million people makes investment in LPG industry viable since one of the challenges the Federal Government as well as LPG operators are forced to grapple with is how to market the use of cooking gas in Nigeria.

It Is currently estimated that only 30% of our population uses LPG as a cooking energy while the remaining 40% uses Kerosene and 30% uses Fire wood

Choosing the right location for your cooking gas business

Choosing the right location for your cooking gas business is crucial to its success. You want to find an area with high demand for cooking gas and low competition. Look for areas with a high population density, such as residential neighborhoods or commercial areas with many restaurants and food businesses.

In Nigeria, the Department of Petroleum Resources (DPR) is responsible for regulating the oil and gas industry, including the sale and distribution of cooking gas. To start a cooking gas business in Nigeria, you will need to obtain a license from the DPR and comply with their regulations and safety standards.

Acquiring the necessary equipment and supplies for your cooking gas business

One of the very first things you get when starting up a cooking gas business are the gas cylinders, gas regulators, hoses, weighing balance and other equipment necessary for gas storage and dispensing. It’s very important to make sure that these equipment meets the safety standards and regulations set by the local authorities.

One of the major costs of starting a cooking gas business is the cost of acquiring a storage tank. The size of the tank you need will depend on the size of your business and the demand for cooking gas in your area. The cost of a storage tank can range from ₦5,000,000 to ₦30,000,000 or more. You can also decide to buy 50kg gas cylinders instead of going for a storage tank. A 50kg gas cylinder costs about ₦95,000. In addition to the cost of the storage tank, you will also need to purchase other equipment such as a gas dispenser, pressure regulator, and safety valves, weighing balance. The cost of this equipment can range from as small as ₦300,000 to ₦9,000,000 or more depending on the quality and size of the equipment.

Profitability and ROI of Cooking gas Refill Business

It is important to conduct thorough market research and financial analysis to determine the potential profitability of a cooking gas business before investing in it. An average cooking gas seller makes about ₦400,000 per month as profit. Let’s take the 12.5kg cylinder as a case study; the average profit you make from 12.5kg cylinder of cooking gas is N1,000.. If you sell 30 cylinders in a day at the average profit margin of N1,000, you will be making N30,000 daily. In a month, you will be making N30,00×30 = N900,000 in a year

For a business you started with N300,000, N150,000 profit is a super profit by all standard. Imagine if you invest more resources and take it higher, your profit will be much more mouth watering. Gas companies, both the suppliers and retailers are making good money in the business. You can become one of them today if you act now!

Offer value-added services: To differentiate your cooking gas business from competitors and increase profitability, consider offering value-added services such as gas installation, maintenance, and repair services. This will not only generate additional revenue but also increase customer loyalty and retention

Diversify your product offerings: To increase profitability and reduce reliance on a single product, consider diversifying your product offerings. This can include offering related products such as cooking stoves, cylinders, and accessories. You can also consider offering complementary services such as gas safety training and consultancy services.

 The cooking gas business in Nigeria and Africa presents a significant opportunity for investment and growth, given the increasing demand for clean and efficient energy sources 

Get our information on how to set up a mini gas station in Nigeria. The information  will ensure that you do not overlook any steps in the construction of your gas station. The resource information will work out the capital required, help you through the basic prerequisites for getting started, and inform you on how to earn money within the first few months of operation

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