Hi there,

Is there anyone that knows a lot about starting a Petrol Station Business? How much do you need to build one?

Minus land, are there any other things that I would need to know? Like licenses, pump and tank prices etc?

I hope to hear from you soon. Thank you very much in advance.

Guy, it will cost you nothing less than 50 million.

Depends on location and calibre . Also try talking to estate agents.
N50m is too much if you want to have just a low key filling station

50 million?
thats way toooooooooo much na

50 million? what are you building?

first thing i will advice you is the location? if you aint got a good location you are a joker.
it doesnt matter if acquiring a good location gulps as much as 15million ( two plots-100*100) depends which city though, am rest assured you can get it back in a year when you have commenced operations, since you already have a location, it still depends on the site ,building in waterlogged regions can be pretty expensive e.g in yenagoa in bayelsa, otherwise if its a level soil, i will put it at between 20m - 30million. i know of people who built with about 18million.

I WILL STILL INSIST ON YOUR LOCATION, there are a lot to it, becoming a dealer with the majors: AP, OANDO, MOBIL etc

felixweah:

Guy, it will cost you nothing less than 50 million.

He's asking about the cost of building a PETROL STATION not an oil rig.

I wonder if nah refinery the guy wan build. No be just to build a filling station?If I'll need 25 million naira to build one, aw much will I need to build a refinery?
Pls, help.

50 million is not far form the truth,unless you want to build a backyard filling station.
in some areas(good locations) the land alone will swallow that money.

It is not a profitable venture except you are into supply of diesel. margins are fixed and small. Imagine running on generator and being made to sell at ridiculous price?

Check out existing thread at below links:

How To Open A Fuel Filling Station?
https://www.nairaland.com/nigeria/topic-58781.0.html

Filling Station For Purchase?
https://www.nairaland.com/nigeria/topic-46174.0.html

my mum is kinda involved in the petrol station business so i know something about it,

the total cost price is hardly in the range of 50 million naira unless maybe for very lucrative areas where the land would really be expensive, like someone pointed above, location is the key, for an average petrol station after DPR bribe, tank price, canopy, pumps, etc, 20mills should be enough though everything is on the rise these days, im talkng based on conditions like 1 or 2 years ago, another important factor is making sure you get good facilities. the tanks especially should be resistant to many factors to avoid problems, like shortage and others

N50 million is about right. All you guys saying otherwise dont have a clue. I have a friend who bought a petrol station on badagry express road for N60 million.

pappilo:

N50 million is about right. All you guys saying otherwise don't have a clue. I have a friend who bought a petrol station on badagry express road for N60 million.

you can buy for N100 M, depending on location and city, but you can well build with N25m, for your friend that bought for N60m, its either he isnt telling you the truth, or he was cheated, what you need find out first along badagry express road is: how much is a plot going for? i know of some one who sold his for N60m in port harcourt, was built on 2 plots, a plot was going for N5M virgin land in that area, his was already into dealership with a major marketer, and the traffic along that axis is such that there are days they sell 33000 litres of pms in a day.

so many factors have to be considered which we do not have, i know of someone who also sold his in port-harcourt for N34m, built on 3 plots , virgin land in the area for a plot is N2.5m,
N50m to build is on the high side if you have land issue taken care of already.

if you need a breakdown i can give you a fair assessment of
1, cost of 4(45000litres ) underground tanks.
2. cost of canopy over your pumps.
3. cost for the building( bungalow)
4. hardcore etc for the flooring5.
5. cost of pumps(6)
6. generator(25kva)
7. borehole.
8.DPR , fire service, police report, etc

and so on

then you should have atleast N6m to purchase products, if into dealership with a major, you will need up to N12M to purchase products,

but he is saying to build, i guess he doesnt need a tanker and truck yet, cos you can always hire one

felixweah:

Guy, it will cost you nothing less than 50 million.

Guy, it wont cost you more than 50million

@ Zheroes You mentioned

then you should have at least N6m to purchase products, if into dealership with a major, you will need up to N12M to purchase products

Is there a difference in being a dealer with the major marketer and also being an independent marketer? What are the pros and cons of being an independent vs being a dealer with a major?

FemiATL:

@ Zheroes You mentioned
Is there a difference in being a dealer with the major marketer and also being an independent marketer? What are the pros and cons of being an independent vs being a dealer with a major?

yes there are.
advantages of independent marketer.
As the name implies, you are independent, in a deregulated economy like ours you peg your price to maximize profits, you can purchase from anywhere and sell at any price.
you get the products at cheaper vrate compared to the major dealers.
you need lesser capital compared to the major dealers because of the quantity the NNPC will allocate to you at the end of the month.
disadvantage
the major disadvantage is the quantity you load from the NNPC is so minimal, that is why you see independent marketers wanting to have a kill from any product they are able to load from the depot, sometimes you may not load for a whole month, i know of independent marketers in port harcourt depot that loaded only 4 trucks of petrol the whole of last year, because  the depot is so unsanitised.

advantage([/b]major)
you can load as much as you can sell, infact you can load up to 15 - 20 trucks ( 450,000litres- 600,000litres) of petrol a month, that was why i said you will need up to N10M-12M for product purchase,they are more dependable because they are regularly loaded with products so your customers can bank on you. less profit oriented compared to independent marketers.

[b]disadvantages
you are overly regulated by the company you are into dealership with, because you are selling with their name and logo so they try to protect themselves, you buy at a higher price compared to independent marketers, infact the difference may be up to N250,000.00 for every truck purchased, but you tend to make up since you have more products to sell that is why i always insist on  LOCATION, I don't mind spending N30million to purchase the land in a good location, i bet you in less than 2 years you will make it up. you are also made to sell the lubricants of the company you are into dealership with, and they will insist on selling at the government regulated price.

i guess those are just the basic differences, but you have an  edge if you can build a second filling station, all you do is one for independent, the other for the major, your generation may hardly beg for bread.

wanaj0:

It is not a profitable venture except you are into supply of diesel. margins are fixed and small. Imagine running on generator and being made to sell at ridiculous price?

to an extent you may be right, if its in area around abuja, i will insist on good location otherwise you may fold up because the eyes of the nation is on you, you sell above regulated price you get sealed

@Zheroes

That was really good info. Thanks a lot man.

@Zheroes, from d post b4 ur last one, u did mention quote in bracket,  [ guess those are just the basic differences, but you have an  edge if you can build a second filling station, all you do is one for independent, the other for the major, your generation may hardly beg for bread.] are u sayin that he can as a major marketer, sell some of his products to his other filling station which was opened as  an independent marketer and make more cash? If he's got the cash to open two filling stations,

edu_austin:

@Zheroes, from d post before your last one, u did mention quote in bracket, [ guess those are just the basic differences, but you have an edge if you can build a second filling station, all you do is one for independent, the other for the major, your generation may hardly beg for bread.] are u sayin that he can as a major marketer, sell some of his products to his other filling station which was opened as an independent marketer and make more cash? If he's got the cash to open two filling stations,

yes thats exactly what i mean, you can send some to your independent station and sell at a higher price, although thats without the knowledge of the major marketer you are into dealership with infact at a stage they should be happy because you are helping to exhaust their quota with NNPC.

If you really want a location where you can sell at the best possible prices, then consider Northern Nigeria ( probably because as an independent marketer, you are very close to the heart of smuggling petroleum products to neighbouring Countries)

@Zheroes

Thanks for your input on this thread,its really straight from the heart.
But i have a question on franchising, we are trying to arrange a lease with an independent marketer for a 2 years term in Delta state.What is your advise.

brownbonno:

@Zheroes

Thanks for your input on this thread,its really straight from the heart.
But i have a question on franchising, we are trying to arrange a lease with an independent marketer for a 2 years term in Delta state.What is your advise.

Sorry for staying abit long, had problems with my connection.
there is nothing wrong about it but it depends on the agreement , dont know how convenient it would be to talk on yahoo messenger, my email is on my profile, i guess the communication will be faster but if you want me to go ahead i may not be abe to respond adequately

Thanks brother.
Adding u to my msger right now

It is not as costly as that! I have worked with an employer who had one filling station,but today station had risen to ten.We did not perform magic.We re-invested and very prudent about spending.I have to be frank it neends full dedication.Otherwise contractors we finish the project.Please contractors dont be annoyed.It does not apply to you all!The truth is bitter.Talk of even supplier/sellers of products/materials will try overcast invoices/receipts.
be watchful,go to it you will be there!

@Kemmy
i have read read everýone's contribution to ur statement.well.frankly speaking 50m is not much for a standered gas station.If u really want to buy functioning gas station in Lagos,u spend more than 50m.I work with a petroluem product marketer firm and we have more than 20 gas station.The last gas station we leased at Enugu was 55m and its just for ten years.So,50m is not much.However,u can get a gas station less than that amount,but the location is the most important factor to be considered when it comes to the issue of Gas station.Best of luck

make sure u sign a franchise with a known and effective n efficient company oooo.not people that will divert ur products.its ok at least it will give u an insight on how u will run it. n pls be the one to be in charge of sales, e.tc dont give them everything to run while u sit down.when they re excesses u will benefit n let it not be for more than two years b4 u get ur license good luck

big business, big profit

It is not a profitable venture except you are into supply of diesel. margins are fixed and small. Imagine running on generator and being made to sell at ridiculous price?

hmm, thank you

if ure not very rich to import products from the refineries say Abidjan, socaf, sogara and co or even europe, forget making a lot of dough from it.
what am i saying? Its a biz that shld be left for the billionaires or else, u can get burnt!!
Margins arent that particularly fantastic when ure a low profile person.

If ure hell bent on doing it, then dont rule out leasing the station
u dont have to buy or build.

Remember, u need plenty money to buy products so while waste 60% of ur capital on CAPEX alone

be wise!

I think most of the time, it is better to just buy one, but the kinda prices that people sell things in Nigeria, it is ridculous, but i think it is a good biz.
Also, people are not honest at all, so will be hard to even know good ones to buy.
So on a second thought, maybe better to build afresh and i dont think you will need that much to get it all done.
You need to find out how much will cost to get the licence, cos the cost of that you cant help it, the rest, if you monitor your own project, you can cut some cost.
Good luck

margins are small but savvy people are still rushing into it because they
know what is there

George_D:

margins are small but savvy people are still rushing into it because they
know what is there

How is that?