Common uses include cooking, powering engines, lamps and
lanterns. It is used as a heating agent
in lighting, cooking, and transportation. The liquid is also transformable into
a crease or lubricant.
Kerosene business is very lucrative because of the margins
and price differentials. On a 20,000
litter sale you can make N1, 000,000 million naira.
Trading in kerosene is easy and the business template
straightforward. All you need to do is find an ideal location, install a surface
tank, get licensed, stock and sell.
Business
Location
The best location for the business is in a densely populated
area. The area should experience heavy human traffic and vehicular traffic. It
could be located in a commercial or residential area.
The amount of space needed should accommodate your
surface tank and storage facility. Some good locations are near petrol stations
and busy roads. Make sure you take into account safety measures while setting
up your surface tank.
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Equipment
There are some equipment’s you need to start a
mini-kerosene depot. You need a surface tank or dispensing pump.
The surface tank should be able to contain 10,000 to
15,000 liters. While the dispensing pump requires a surface or deep storage
facility.
Others are measuring can, jerry cans and storage bin. You
need standardized measuring units, bottles and kegs. A larger depot would need
a kerosene tanker for haulage purposes.
Sourcing
the Kerosene
There are two ways to source for kerosene. You could buy
directly from NNPC or through an independent marketer.
Most mini-depots get their products from independent
marketer. This is because of the bottlenecks they encounter when they try
getting it from the source.
Make sure your source is reliable and trustworthy. This
is important due to the proliferation of adulterated products. Adulterated
products are highly volatile and dangerous. They could cause a fire hazard or
even death.
Hire
Staff
You need very few staff to successfully run a kerosene
depot. You could run the business yourself or hire a sale attendant.
Kerosene dispensers are easier to manage than surface
tanks. You can hire anyone with a school leaver’s certificate to dispense the
product.
License
and Certification
To sell petroleum products you need a license. Register
the business with the petroleum product marketing company and department of petroleum
resources.
Although the process is tedious you would be awarded a
certificate and permit to buy directly from the source (NNPC). This will
effectively increase profit margin and access to quality product.
However retailers that deal with only 10,000 litters at a
time do not need a license. They can only purchase the product from independent
marketers.
Marketing
The only marketing you need is a good location. You need
a sign board and print flyers and posters. The product is an essential
commodity for cooking so customers will come. You need to keep your prices
competitive to attract patronage.
Related Resources
- How to Start a Petrol Station
- Starting a Crude Oil Export Business
- Write a Business Plan for a Petrol Station
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