Gas business in Nigeria is undoubtedly one of the fastest moving businesses if not the fastest in the country, and it is a good source of daily income for those searching for daily income businesses.
Despite the frequent hike in the price of cooking gas in the country, the usage of gas for cooking never drops, instead, it keeps increasing, and in that way, generating more revenue for sellers.
This business is very profitable and also easy to start since you don’t need huge capital, although proper training is required since the business has some risky sides.
That is why this post is created to show you everything you need to know about the cooking gas business in Nigeria including its profit margin, startup capital, risks involved, and overall how to start cooking gas business in Nigeria, as well as how to make it a success.
Are you ready to know more? Then, keep reading….
About Cooking Gas Business
Cooking gas business is a very profitable business that anyone can start anywhere in Nigeria with as little as N100,000 and above you can make up to a 100% ROI (Return on Investment) per bottle of gas.
This business involves refilling gas cylinders for people at retail or wholesale prices depending on the size of the business.
A lot of people have ventured into this business for a few years and have been making a lot of money from it, especially during the hike in price or scarcity of gas in the country.
While this business is profitable due to the regular increase in demands for cooking gas for households and restaurants, it comes with a lot of risks which makes getting a prior knowledge of gas refiling a must while looking to venture into the business.
However, from training to starting the business, just a little capital is enough to start a cooking gas business in Nigeria.
How Much Do You Need to Start a Cooking Gas Business in Nigeria
The most common question asked by people looking to start a cooking gas business in Nigeria is; what is the cost of setting up a mini gas plant in Nigeria? or How much does it cost to start a gas business in Nigeria?
Well, the answer to this question varies depending on the type and size of gas refilling business you want to start.
From the low end, you can start a mini gas refilling business in Nigeria with N100,000. Here you’ll need to rent a gas cylinder (bottle) from a distributor for a cheap price fill it and sell it at retail price to the final consumers.
With more capital and on a larger scale, you can start a cooking gas business with anywhere from ₦8 million to ₦15 million. Here you’ll need to set up a good-looking gas plant and sell at both retail and wholesale prices.
Whether small-scale or large-scale gas business, if done properly, there is a lot of profit to be made.
How Profitable is Gas Business in Nigeria
Usually, even before looking at the cost of starting a business, knowing whether the business is profitable or not and if it is worth your money and time is very important. So, is cooking gas refilling business profitable in Nigeria?
The simple answer is YES! Gas refilling business is very profitable as you could make anywhere from 30% to 100% profit margin as a cooking gas refiller/seller.
However, keep in mind that there are some factors that may affect and impact the profitability of this business. In a case where there is leakage of gas or unexpected wastage (e.g busting of hosepipe), you may end up breaking even or having a little loss.
How to Start a Profitable Cooking Gas Business in Nigeria 2023
Starting a cooking gas business in Nigeria is very easy, although the strategy may differ depending on the type and size you’re looking to go for.
Whether you want to start small or big, the following is how to start a gas business in Nigeria.
1. Start with a Proper Market Survey
In any business you want to start, doing proper market research is very important. This will make you know more about all aspects of the business, including how it works, as well as what to do and what not to do.
Although this post is a part of your market research. However, take your time to do a thorough market survey by approaching gas sellers in your area, creating a business rapport, and learning from them how to start the business in your area.
They’ll enlighten you more about the business, when to start, where to start, the marketing strategies, pricing, and most importantly, how to register your business so as not to get disturbed by anyone after starting.
Also, if there are associations of gas sellers, doing market research in your area will help you know the best.
2. Pick the Best Approach for You
After doing your market survey and knowing the do’s and don’ts of the business, as well as the types and sizes, it is now time to check and balance the best approach.
A cooking gas business approach depends heavily on your budget. For instance, if you have less than 500K, the best approach would be to start out as a retailer (mini gas plant) where you sell in small quantities (1kg, 3kg, 6kg, 12.5kg, etc).
While with a larger capital between ₦5 million to ₦15 million, the best approach would be setting up a standard gas plant where you sell to both retailers and final consumers.
3. Get the Proper Knowledge and Training Needed to Start Gas Refilling
Once you’ve picked the best approach for you, before starting, you’ll need a little experience with the practical aspect of gas refilling.
Since cooking gas is highly inflammable, it will be a bad idea to just jump start without any prior experience as most people do.
Therefore, it is necessary you get all the proper training from the location of your business place, to how to refill gas, and even the safety practices to work with as a gas seller.
4. Get the Needed Equipment
From your market survey and skill acquisition, you should have known all the materials and equipment needed to start a gas refilling business in Nigeria, as well as their usage and application. Just go ahead and get them.
Or, keep reading to find out all the equipment needed later in this post.
5. Look for a Good Location
Unlike other businesses in the oil and gas industry such as the engine oil business that requires a location close to mechanics’ shop in order to make it succeed. There is no certain or mandated location to start a gas business.
This is because, in every street and every neighbourhood, there are surely gas cooker users. So, therefore, you can start a cooking gas business even in front of your house.
However, it is ideal you look for a well-populated area or an area where there is no (or hard to find) gas plant or seller.
6. Get a Good Distributor
Once you spot a good location and get all the needed types of equipment to start, the next thing is to find a good cooking gas supplier whom you can buy from at the cheapest price.
If you started out as a small scale gas seller (mini gas plant), you can look for a good large scale gas plant that you can buy from. While as a large scale gas plant, you’ll need to find businesses of the same size, build a business relationship with them and get a truck of gas to start with.
7. Start Refilling and Selling Cooking Gas
After getting a good distributor, what is left is to get your stock and start selling. As part of selling, you would want to offer discounts and make your price competitive if you have competitors in your area, although the price of gas is just like petrol where the price is usually certain/fixed for a specific period of time.
If you started on a small scale, you would want to reach out to neighbours, and people in your area and then tell them about your business, and the discounts offered, and also promise good and satisfactory service.
While as a standard gas plant, you would want to reach out to retailers and also offer them the best price, as well as discounts in order to get them to patronize you and make them returning customers.
8. Get a License from the Department of Petroleum Resources (DPR)
After putting everything in place and starting your cooking gas business, it is necessary you apply for and get issued a license by DPR. This is a must for all gas plants especially large-scale gas plants in order to avoid frequent disturbance and a possible closure your business.
You can visit a DRP branch office in your area, or visit their website to get more information about the license. Either way, get your police Report, Fire Planning approval, state land, physical planning permit, and town planning permit ready.
Read Also: Businesses to Start with 30K in Nigeria
Equipment Needed to Start a Cooking Gas Business
The following are all the types of equipment needed to start a successful gas business in Nigeria.
- Gas tank (cylinder/bottle)
- Verve screw
- Sets of mechanical tools
- Fire extinguisher
How to Succeed as a Cooking Gas Seller in Nigeria
Since there are high demands for cooking gas across every state in Nigeria, becoming successful in the business is very easy. However, to make yourself more money from the gas refilling business, you need to go a step further.
The following are some of the best practices that will help you succeed as a cooking gas seller.
- Location of your business: Although you can start a gas business anywhere as long as there are people. However, setting up your gas plant in a well-populated area will drive the most sale.
- Start with the cheapest price: At the very start, you’ll need to offer the best possible price in order to get people to know you and build brand awareness. As time goes by, you can later regularise your price to tally with others, but since a lot of people have already known you, you’ll still get sales more than your competitors.
Risks Involved in Starting a Cooking Gas Business in Nigeria
As we all know, every product of petroleum are highly inflammable and cooking gas is not an exemption. In fact, it is riskier to sell gas than petrol, especially on a larger scale.
The causes of flame outburst to watch out for as a gas seller are:
- Leakage of gas cylinder: make sure you check possibly every customer’s gas cylinders before refilling. Also, regular take note of your gas tank/cylinder/bottle in order to quickly detect if there is a leakage.
- Setting up a gas plant near a restaurant, or panel beater: You should by all means avoid this. Since both restaurants and panel beaters use fire/flame, it could be dangerous to have a gas plant located near them.
With the steady increase in the use of cooking and the frequent hike in price, cooking gas refilling business is a business that is worth it.
With this post, I believe you’ve know more about the cooking gas business in Nigeria, how it works, things to do and the ones to avoid, and most importantly how to start gas business in Nigeria with a small capital and become successful.