Small kerosene Deport: How to start a kerosene Supply and Retail Business

Kerosene is a product used for cooking in many African countries. It is in high demand and attracts margin interest. The price of kerosene is very volatile based on the supply, demand and source of the product.

The major consumers of the product are third world countries. They use the dual purpose kerosene to provide light through kerosene lanterns, burning refuse and cooking.

They cook using kerosene stoves which are cheaper than gas cookers. The business is very lucrative because of the demand and the fluctuating prices.

Kerosene retailers store the liquid in storage tanks and sell directly to individual consumers. Other installs crude kerosene dispensing machine to service their customer.

Petrol stations are not left out in this business. It’s not unusual to see a designated dispenser allocated solely for kerosene. Although kerosene retailers encounter a few challenges they break even in a couple of years.

Are you interested in the oil and gas business then you can start your enterprise as a kerosene retailer.

Why kerosene is in High Demand

Kerosene is in high demand because technically it is cheaper than gas. Rural and poor urban dwellers can’t afford to by gas cookers.  They prefer cooking with cheaper alternatives such as charcoal, firewood and kerosene cookers. Kerosene cookers are crude, locally manufactured and affordable.

Why start the Business Venture

There are many good reasons to start a kerosene retail business. Kerosene is in high demand and backed by a huge population.

You retailers provide value to low income earns who use kerosene daily. Other reasons to establish a kerosene outlet are profitability, easy to store and multiple applications.

 How to Start a kerosene Retail Business.

Register your Enterprise

There are three petroleum products commonly used by consumers. They are the AGO, PMS AND DPK which represent Dual purpose kerosene.

There are a lot of bottlenecks, permits and licensing required to run a kerosene retail business. In the world of oil and gas business government permits are difficult to get.

However third world kerosene dealers who start with 10,000 litter and bellow are not obliged to secure licensing. They only need trade licensing to start the small enterprise.

A small retailer could decide to build surface storage tanks and dispense through a tap. Others buy one or two kerosene dispensers.

Haulage

You have two options buy a haulage truck or lease. They come in different capacity such as 13,800 liters, 30,000, 33,000 and 45,000 litter trucks.

You need to register the truck and secure lifting permits. There are very powerful unions and associations that regulate the practices of oil and gas companies.

You also need DPR peddlers permit to operate your business.

Location

The best location is close to residential areas and urban dwellings. Build surface tank of 5,000-10,000 liters capacity. The tank should meet government specification on design.

Another ideal location is near foot and vehicular traffic. Source you products from major marketers in your country. Some kerosene retailers use the services of independent marketers and distributors.

Marketing

People will come to your retail outfit if your prices are fair. A simple method is to place a signboard with the current price of kerosene.

The board should also indicate availability or non availability. Offer your customers some incentives to encourage patronage.

 Conclusion

To run a successful kerosene retail business you need a proper accounting system. Hire competent staff such as sales attendants, certified drivers and security guard.

The enterprise is capital intensive and you face lots of bureaucracy. Sometimes you will face supply challenges, fluctuation in prices and theft. Despite the challenges the business remains highly profitable.
Start a Diesel Supply Business