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How To Start AutoGas Station In Nigeria

Do you know about AutoGas? There’s a growing policy direction in Nigeria to move the country towards AutoGas fuel. The policy direction is inspired by the large deposit of un-utilized gas in the country. Nigeria currently has over 200 trillion cubit feet of gas already discovered.

However, the consumption side is still at a very low rate. Current consumption rate is below 1 million cubit feet, which is even 4 million below government gas utilization target for the next 5 years. That means government hopes to add additional 4 million cubit gas to our consumption scale through AutoGas.

Imagine how large the AutoGas market will be in the next 5 years. Now, compare that to 10 years after. If you are not thinking about AutoGas now you are actually waiting to miss another huge opportunity that can make you a billionaire. The first to tap into major opportunities like this, always turn out to be billionaires. Ask Otedola and Dangote.

There are basically three ways gas is consumed in Nigeria:

  1. As Cooking gas
  2. As AutoGas
  3. For electricity generation

While gas consumption for electricity generation is limited to the number of power plants utilizing gas for power generation, cooking gas and AutoGas are the two higher utilization option for gas in the country. And AutoGas being the highest option if Nigeria hopes to tap into its large gas deposit.

So, in this post, I will be sharing with you a guideline into AutoGas business. I have already done several articles on cooking gas business, which you can also find on this blog, if your preference is cooking gas. But for those who are dreaming of how to tap into the AutoGas potential in the country, here’s is your simple guide to help you get started.

And if you need help, I will be glad to consult for you on the business.

Understanding AutoGas

Let’s get into the world of AutoGas. First, I will start by explaining the difference with LPG fuel from petrol fuel. LPG is a fuel gas – liquified petroleum gas or liquid petroleum gas (LPG). It’s also called propane or butane gas. It’s a flammable hydrocarbon gas mixture. Which is also used to fuel vehicles. That’s how it got its name as AutoGas.

This LPG fuel is a blend of propane and butane, used to fuel the internal combustion engines. It works the same for both vehicles and stationary generators. Even though this fuel is often called AutoGas it’s the same as LPG or cooking gas. So this gas will serve as an alternative to petrol and diesel fuel in vehicles.

However, with the current use of petrol cars, it would require a conversion before AutoGas can be used on cars in Nigeria. This conversion will enable cars to use any of the types of LPG fuel, which includes, propane, butane or a mixture of both propane and butane.

LPG-Autogas Fuel Versus Petrol Fuel

Let start by analyzing the cost. AutoGas is about half the price of petrol fuel. But in usage, you will be using about 20 percent more of AutoGas than fuel to cover the same mileage. This LPG is also in a liquefied gas, against petrol which is already in liquid form, at normal atmospheric pressure.

But AutoGas will save cost of operating your vehicle by 50 percent. It’s also said to be more fuel economy, including saving cost of regular vehicle maintenance, while it reduces or controls emission that could impact on the environment.

Also, AutoGas has a higher octane rating, which is over 100 octane. This will result in cost saving on fuel consumption of about 40 percent, compared to petrol. However, the savings on cars will be more to cover the cost of the conversion to AutoGas, especially for those who travel long distances, like transporters.

How AutoGas Conversion Work

Now, let me explain how this AutoGas conversion works. Although, there will be vehicles built to only use gas as fuel. But for the existing petrol cars, there will be a conversion to AutoGas to enable it operate on fuel-gas. It will be like adding a second fuel system, rather than replacing the existing fuel tank. Your car will be driving on two fuel systems, which you can switch at will.

This AutoGas conversion takes this simple process and require the following:

  • LPG tank
  • Intake manifold modifications
  • A new ECU
  • And various fittings

When your vehicle is converted, it will now run on both fuels – AutoGas and petrol fuel. And there are four types of autogas conversion systems:

  1. Converter-and-mixer systems
  2. Vapour phase injection (VPI)
  3. Liquid phase injection (LPI)
  4. Liquid phase direct injection (LPDI)

However, there’s actually no difference between AutoGas and LPG excerpt the addition of butane and propane. LPG is already a flammable hydrocarbon gaseous fuel. It’s only the inclusion of propane, butane or the mixtures of both gases that’s also known as AutoGas.

How LPG Engine Works

Let’s look at the type of engine that uses AutoGas. This is based on the four types of AutoGas conversion I listed before. Any of these systems or all of them will be used in Nigeria.

#1: The Converter-and-mixer systems which is the oldest style, and dating back decades, is still widely used. In this process, the LPG liquid fuel is converted into vapour and then mixed with air before going into the intake manifold.

#2: Vapour phase injection (VPI) is a system that uses a converter and mixer system, but the gas exits the converter under pressure and is injected into the intake manifold. And it’s electrically controlled injectors improve the metering of fuel to the engine, fuel economy and power, as well as reducing emissions. And this has been the most popular type system in recent years.

#3: Liquid phase injection (LPI) is a system that injects liquid directly into the intake manifold, where it vaporises, not using a converter. But the fuel vaporising in the intake manifold cools and increases the density of the intake air, substantially increases power output, improves fuel economy and with lower emission, when compared to VPI systems.

#4: Liquid phase direct injection (LPDI) are the most advanced systems. This one injects liquid LPG directly into the engine combustion chamber. And the LPG fuel instantly vaporises, cooling the combustion chamber fuel-air mixture during the compression stroke, with further performance and emission improvements.

Tips To Setup An AutoGas Station

Now, let’s get into the business part of this article. You have already learned a lot about AutoGas. Let’s see how you can convert this knowledge into money by starting your own AutoGas station.

The best way to view AutoGas station is to look at the petrol stations around you. Everything will be the same, excerpt for the equipments and product. If you are among those who would get started now, you will be taking advantage of government incentives and support at this stage of the business.

The federal government of Nigeria is really pushing for AutoGas inclusion. And it’s the best time to start the business than when too many regulations will be required to stop further investment or eliminate those who don’t have large capital to setup. Checkout the tips below to help you know how to get started.

#1: Study The AutoGas Industry

I strongly advise that you study this industry properly before you start your investment. There’s still so much to learn about AutoGas. And there is also opportunity to strategies on your plan while there’s yet to be competition.

What you know about the industry will define how you invest in this business.

#2: Prepare A Bankable Business Plan

A business plan is usually the best way to start preparing for any investment. It’s from your business plan you would formulate your best strategies. Also, you will need a professional AutoGas business plan to access government loans available in the national gas development program.

If you need a consultant to write the plan for you, it cost between N200,000 to N300,000 to package a proper business plan for AutoGas station.

#3: Find The Right Location

The location is too important for AutoGas station. You must ensure your station is located in the best place possible. In this business, the best location wins. You can’t afford to make such mistake with this one.

It’s important that you start now acquiring choice lands where you can setup your AutoGas plant. You may even acquire an existing petrol station. It will be cheaper to acquire the lands now than in 5 years time.

Also, don’t ignore to work with an AutoGas consultant to assess the locations for compatibility with DPR requirements and also profitable for your investment. Location assessment cost around N300,000 to N500,000 per location. For multiple location planning, it’s advisable to hire a consultant even in the acquisition of the choice locations.

#4: Get Regulatory Approvals

Like every oil and gas business, you will need regulatory approval to setup an AutoGas station. These approvals are common with other DPR approved businesses like petrol station and LPG plants.

You can get more information on DPR website or visit any of the DPR office near you. Note that you are not to begin setup without first approaching DPR for approval.

#5: Instal Your AutoGas Station

When we talk about AutoGas station, it’s primarily gas tank, dispensers, pumps, and accessories. You need to install AutoGas equipments. Get current cost of equipments. Design your station building plan if you are starting from the scratch. Remember to add installation workshop where the conversion of cars to AutoGas engine will be done.

The cost, equipment and installation of AutoGas station is not different from that of LPG plant. The size of the tank you chose determines the cost of the setup.

#6: Test And Start Operation

One of the most important and last approval from DPR is licence to sale. Once you get this licence it means you are finally approved as an AutoGas station. You can now open your station for business.

This can only happen after proper testing of the station and all safety requirements are adhered to.

Other Opportunities In AutoGas

One important opportunity to be directly derived from AutoGas is installation of the conversion kit. Each AutoGas station would need its own installers. Either employed in-house or outsourced to SMEs that can provide such technical services to car owners who would want to convert to AutoGas.

AutoGas Mechanics is going to be the main attraction at this beginning stage. The federal govern,net has already released the modalities for the conversion and the cost implication. For now, it would cost as much as N250,000 to convert your car to AutoGas.

Although, car owners won’t be paying cash for this conversion but it would be eventually paid up overtime. The idea is to deduct the cost of the conversion from AutoGas purchases. So, each time you buy AutoGas gas a percentage of the cost is deducted from that purchase to pay for the conversion cost.

If you are already a mechanical engineer, this could be your chance to reposition yourself in the auto business. Acquire the right skills for AutoGas engineering now. Already, fuel generators are being converted in the country.

Converting Fuel Generators To AutoGas

Another huge opportunity that already exists for AutoGas is generator conversion. The skill is already available. You can go learn it. If you are already a generator mechanic, it’s a chance to upgrade your skill. It’s not difficult, just in less than two days training you can acquire the skill.

To convert your generator to LPG generator, you will need to have the following:

  • A cooking gas cylinder
  • Filled up with gas
  • A low pressure regulator
  • 3 yards of gas holes and 2 clips.

That’s what you need to get for the conversion. The only thing that requires installation is the carburetor gas kit. While the low pressure regulator acts as the control on the top of the cylinder like the fuel tap. It’s from there that you have control to open and close the gas supply to the generator.

The installation is not hard. It’s just to change the carburetor, that’s all. Your generator mechanic can install it with little help if he hasn’t done it before. And the 3 yards of gas holes is to extend the gas cylinder a bit far from the generator.

Conclusion

Don’t think it’s going to take long before Nigeria moves into AutoGas consumption. It has already started. In the next 5 years the demand for AutoGas will exceed that of cooking gas. Imagine if cooking gas plant is a profitable business now, what do you think AutoGas would be like in the next 5 years.

Also, I encourage you to get more information or hire a consultant to develop an Investment document for you in AutoGas. The document won’t cost more than N300,000 to develop. With such investment document you can plant your Invest,eny in AutoGas.

The time to start your investment is now. You can start with location assessment and acquiring choice lands for your proposed AutoGas stations. The beauty of this is the multi dimensional approach to it. You can build a billion naira business with AutoGas. All you have to do is to be the first investors to rightly position yourself in the market.

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How To Practically Setup Cooking Gas Plant (Part 2)

 

In the part one of this video, I showed you the basic requirements to setup cooking gas plant. But in this second part, I will be showing you the processes of putting the requirements together into a gas plant.

The Processes

Let’s get to how to put these requirements together into a working cooking gas plant.

– Hire a Consultant

Your first step should be to hire a consultant. The problem with hiring a consultant is not knowing how much to pay. But, you can choose to pay as you need to use a consultant. That way you only pay a consultant to do specific assignments for you.

– Acquire a Suitable Land

The land must meet DPR location requirement for gas plant. It’s advisable to work with your consultant when acquiring a land for gas plant, to guide you on making the best choice. A consultant take between N50,000 to N100,000 for this service.

– Conduct Location Assessment

It’s always in your best interest to consider location assessment of the land for cooking gas plant. Location assessment will look into its Suitability and profitability for a gas plant. This should be done before you even start DPR licensing.

It cost between N100,000 to N200,000 for a location assessment.

– Package an LPG Business Plan with Feasibility Study

Whether you are looking for a loan or not, you need a business plan. You shouldn’t start a cooking gas plant without a clear picture of the profitability in your chosen location.

A professional business plan is packaged with your chosen location LPG market statistics. Don’t buy a copy and paste business plan that’s sold online. They were not packaged for your specific location and cannot give you a clearer insight into the profitability in your location.

Get a consultant to package one for you. LPG business plan cost between N150,000 for 2.5MT and 5MT plant size. But for 10MT and above it’s N300,000.

– Start Government Licensing

You might need to know what it would cost for the different licensing that’s required for LPG plant. Some of the costs listed here may be different in your location. This cost is just as a guide.

  • Police report cost around N20,000 to N50,000
  • Fire service approval is around N50,000 to N100,000
  • Tax clearance certificate cost N50,000
  • DPR approvals is between N2 million and N3.5 million

You can apply for all these licensing on you own. But if you need help contact a consultant.

– Purchase or Construct Your LPG Plant

Gas plants are like Manufacturing outfit, even though it’s job is just to store and dispense cooking gas into cylinders. You are either buying an already assembled plant or get a company overseas to construct it.

The only difference between the two option is price. It will probably cost less if you are getting it directly from the manufacturer overseas, as against buying it from a local vendor. You need DPR authority to construct (ATC) approval before you can buy or construct a gas plant.

Your consultant should help you with contacts to companies for any of the options you choose. And there are several companies to pick from.

– Install the Plant and Train Your Staff

After purchasing the plant, it would need to be installed in your approved location. Note that until you get DPR approval you cannot start installation of gas plant. That would be illegal to do so without approval.

You will also need an engineer to install the plant for you. If your consultant is also an engineer that’s a plus for your project. It means all the expertise is with you already. Installation can cost between N1.5 million to N3 million. Some plants are turnkey or plug’N’play. And doesn’t require installation.

– Start Selling LPG for Profit

Finally, its time to start selling cooking gas. Remember to conduct successful testing, and train your workers. This is the easiest part of the business, when you are counting money from the sales.

You can reach me by phone/text/WhatsApp Number: 07087770518 for more information. And subscribe to MyBlog TV YouTube channel.

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How To Practically Setup Cooking Gas Plant (Part 1)

I’m going to share with you the simple steps you need to setup  cooking gas refill plant. Cooking gas is as the name implies, is a gas for cooking. A gas refill plant is similar to a petrol station. But first, let’s look at the Financials.

– How Profitable To Setup Cooking Gas Plant?

Let’s start by exposing the profit potential of cooking gas business. Cooking gas is sold with a wide margin of between N60 to N100 markup. If you sell 30,000 kilogram per month, you make between N1.8 million and N3 million.

Now, I want to show you how to setup the business and start refilling cooking gas. I have broken it into two major parts:

  1. The Basic Requirements
  2. The Processes

– Basic requirements

If you want to startup this kind of business, you need to understand the basic requirements. I will explain it one by one.

– Startup Capital

The number one requirement is capital. You will need capital and lots of it. It’s not the kind of business you are asking, can one million or two set it up for me? This is not that kind of cheap setup businesses. Wait till I reveal all the other requirements, which your capital is needed to do. It will help you understand the capital requirement better. Let me not quote figures that may discourage you.

– Registered Company

You will need a registered company. In this case, not a business name or enterprise, but a limited liability company, dully registered with Corporate Affairs Commission (CAC), with at least 5 million share capital.

Note: Also ensure that one of the services the company is registered to do is Oil and gas services.

– Land or Petrol Station

You will need a land or a space in a filling station. The minimum required land size is 100 by 100 square feet. And it’s suitable for LPG plants not more than 10 metric tonnes capacity tank.

If you are starting with above 10 metric tonne size plant, you would need up to four plots of land. While setting up inside a petrol station requires a minimum of 1,300 square meters of space, and for a maximum of 5 metric tonne plant size.

– Government Approvals

You will need a approvals, and lots of them too. But the most important is DPR approval. DPR issues 3 stages of licenses for gas plant setup. Which are, location approval, authority to construct (ATC) and license to sell.

Other approvals required for processing DPR licensing includes:

  • Tax clearance certificate
  • Fire services approval
  • Police report
  • And Town planning

You will also need survey plan and environment assessment report carried out on the location.

– LPG Equipment Partner

You also need an equipment partner. Either a manufacturer (from China, Turkey or Germany) to build the plant for you or a local supplier.

There are different sizes of gas plants, but below are the popular ones:

  •  2.5 metric tonne plant
  •  5 metric tonne plant
  •  10 metric tonne plant
  •  20 metric tonne plant

The cost starts from N4,000,000 to N30,000,000. Setup cost depends on the size of the plant, the choices of equipment and the accessories.

– LPG Consultant

As a consultant, I won’t skip this part. Although, it’s essential to this business that you have a consultant with you. Unless you are an expert in the oil and gas, if not, you need a consultant. I will explain what the consultant would do for you in the next part of this video, which is in the processes.

You can reach me by phone/text/WhatsApp Number: 07087770518 for more information. And subscribe to our YouTube channel MyBlog TV. Also, ensure you also watch the concluding part of the video in the part of it. It will give you the processes to follow. CLICK HERE NOW TO WHATC PART 2.

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How To Reduce LPG Setup Cost In 2021

Every year, as activities begins to wind up, most people begin to make plans for the coming year. And as most people also lost their livelihood due to the pandemic, there’s limited funds available for startups of any business. As you plan to invest in cooking gas plant in this new year, I want to show you how to reduce LPG setup cost.
It’s okay to start early making plans for the new year. The pandemic may seem like a bad omen, but it also exposed things in the LPG plant business. As investors tries to save cost of setup, new revelations of doing things are also emerging.

One of it is how to reduce LPG setup cost. This will change the way you see LPG cost analysis in the coming year. Generally, LPG investment cost went down as against what it cost prior to this point.

What LPG Setup Cost Was Reduced?

There are three main cost factor in setting up LPG plant in Nigeria. Let me list the three in no particular order:

  1. Land or Location
  2. DPR licensing
  3. LPG plant equipments

These three are the real cost factor in LPG plant setup. You can see how they affect the business and their different roles as well. Let me take each one briefly to help you recap it better.

 

Land Or Location:

This one is what determines the profitability of the LPG plant. You can’t trade this one for anything else. The best location will always win in this business. That’s why you should invest in the best location.

That starts with buying land in a choice location. However, whether you buy in a choice location or not, it’s recommended that you conduct a location assessment. This report gives you clear insight on the viability of the location for LPG plant setup. A proper location assessment would cost between N200,000 to N300,000 depending on the part of the country you reside.

 

DPR Licensing:

This one is just the referee of the business. Without them you cant even start the business. So, you shouldn’t try to outsmart the referee for any reason. Get all the necessary approvals, and follow proper procedures as recommended by DPR.

If possible, hire a consultant to handle your DPR licensing process. Depending on your location, a consultant can take between N300,000 to N800,000 to help you process your DPR licensing.

 

LPG Plant Equipments:

Now, the last one on the list is even what makes your business work. It’s the soul of your business. Without this you don’t have a gas plant. You may have all the best idea on how to setup LPG plant but if you don’t get to the point where you build the gas plant, you don’t have any business.

Who builds your equipment and the cost implication is one factor you can control. And there are many options to this regard. You can choose to buy used or brand new equipments, Chinese equipments, or European equipment for your setup. Whatever you finally decide to choose is good. You only need to weigh its pros and cons.

The best LPG equipment is not just the cheaper one but the equipment with a longer lifespan. Remember, it’s going to be used on a daily basis. There would be normal worn and tear. The longer it takes for major tear and worn to show up the more cost it saves you.

 

How To Reduce LPG Setup Cost

So, it’s important how you handle the costs associated with the setup. Although, you may not be able to determine the kind of cost you get when buying a land for the gas plant location. This one maybe beyond your control. If you happen to save cost during the process, good. But don’t expect anything out of the ordinary.

The two known areas where cost is possible now is both DPR licensing and plant equipment purchase. Of course, DPR license was reduced from as much as N3.5 million cost implication to now around N2 million by DPR. That was government own way of deepening the increase in the number of gas plants in the country.

When it comes to LPG equipment, nothing actually changed in price. Yes, it wasn’t like price suddenly dropped. If there’s anything strange about Nigerians commerce is increase in dollar exchange. And that further increased the cost of LPG equipments. So, what really changed?

Since cost of LPG setup increased due to the exchange rate, most investors are looking at directly importing LPG plant equipment themselves, instead of buying from local dealers. This will reduce LPG setup cost by almost 50 percent.

 

Importing LPG Plant Equipment

Some people may become apprehensive when the issue of importation comes up. They start thinking of dollar exchange, shipping fee, duty fees, clearing fee and wharf rat (if you know what that means). But all that shouldn’t bother you at all. The idea of importing your gas plant equipment is to reduce LPG setup cost.

However, if you follow my guide you will have a successful import transaction. So, let’s get started. Your gas consultant should also be able to help you with reputable LPG equipment vendors to import from.

The first thing to consider when importing your LPG plant equipment is the supplier. In this case, we are referring to foreign manufacturers. You can find them in either China, Turkey, Germany and some other European countries. I strongly recommend that you buy from either China or Turkey. Most of them advertise online on social media as well.

 

China Versus Turkey LPG Equipment

I think the difference between these two are not that much, but I will try to refer to those things that really matter in this business. If you are importing your LPG equipment from China, price maybe cheaper than what you get from Turkey. So, if the cost is of major interest, then China is your target for a supplier.

Turkey is also cheap considering the cost here in Nigeria. And there is no much price difference between China and Turkey prices. It’s just some fraction of change. So, it might not make much difference cost wise if you buy directly from either China or Turkey.

However, when it comes to warranty, China doesn’t give any. You must know that what you paid is at owners risk. But with Turkey LPG equipment you get up to 20 years warranty on the tank itself, 2 to 3 years on the dispensers and 2 years on the pumps. You should discuss all these issues with your supplier when ordering. It’s always better to involve your gas consultant when doing this negotiations.

Shipping, Clearing And Transportation

Once you have ordered the LPG plant equipment from either China or Turkey as I advised, your next line of action would be to ship it to Nigerian and transport it to your plant location. You should put the cost implication in your advisement.

Once you have ordered the LPG plant equipment from either China or Turkey as I advised, your next line of action would be to ship it to Nigerian and transport it to your plant location. You should put the cost implication in your advisement.

Let start by looking at shipping cost in this regard. There’s no fix shipping cost, since size and weight is under consideration when shipping LPG equipments. But one thing is certain, the cost won’t be so cheap but it won’t be too high to cost more than it would cost if you had bought the equipment from local vendors.

Remember that those local dealers also shipped it from overseas. They paid shipping and added the cost in their equipment sold to you. So, whether you bought locally or imported it yourself, you are still paying for the shipping.

Another cost input is clearing fee and transportation to your plant location. Yes, after you paid import duty you still need to move the equipment to site where it will be finally installed. Duty is charged by custom and a haulage company would be needed to transport it in a big truck to your location.

 

Installation, Maintenance And Training

Now, who installs your equipment is critical. Remember I advised you earlier to hire a consultant during the discussion with the equipment supplier. A consultant may charge you N50,000 to N200,000 to be involved in this kind of negotiation. The consultant would ensure all the components and installation gadgets are included in the shipment.

Another way to go about this is to hire a consultant who has technical installation know-how. That way you hire the consultant both as an expert and the equipment installer. Because the challenge of importing LPG equipment is the installation. Don’t trust most of the so called ‘engineers’.

Different LPG equipments comes with different design specifications. An engineer need to understand the particular installation guide to do an efficient job installing it. Remember, this is gaseous product and should be handled with the strictest care.

Also, the maintenance is another thing. Outsource it to the right consultant or company. You need prompt response when there’s any maintenance issue. That also includes training your initial workers during takeoff.

 

Conclusion

Starting a cooking gas plant is cost demanding. That’s because you have to deal with land owners and at the same time equipment vendors. These are what drives up LPG setup cost. If you can acquire a less expensive land in a viable location and reduce the cost of LPG equipment, your startup cost will be minimal.

Moreover, you should engage the services of a cooking gas consultant when executing your LPG plant project. In the multitude of counsellors there’s safety. But the most important safety here is the installation process, which your experienced consultant would help you achieve successfully if you carry him along with your LPG equipment importation.

 

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5 Simple Reasons LPG Plants Are Profitable

Do you know how to start cooking gas business? Even if you do know, I want to share with you 5 more reasons you should be starting one now. If you have been procrastinating, stop it now and join this business. Even the government wants you to start now and not tomorrow. 

A lot of things are happening in the cooking gas business. And you won’t want to miss out the good part, which is to start cooking gas business now that the market is very juicy with less competition. 

If you have been observing the news lately, there is a push by the federal government of Nigeria to deepen the usage of LPG in the country.  And this push will start yielding results soon. If you have been procrastinating about starting your own cooking gas plant, this maybe the reason to revisit that plan and put it back to work. 

Understand LPG Demand Curve

For most people, LPG is just cooking gas. And as far as they are concern, it not such a huge business. Especially, the big investors. They consider LPG as business for the startup investor. They couldn’t see the huge figures. 

At most they say, 60,000 kg in monthly sales would give you just N16.8 million in monthly revenue. What they didn’t know is that gas plant have sizes. Moreover, if you setup 20 of those plants that would be N16.8 million multiplied by 20. Do the maths for yourself. 

Another excuse is that demand is not daily like fuel consumption. Yes, demand is not daily for cooking gas, but imagine the demand curve when 100 percent of the households in the country uses cooking gas. United nation puts Nigeria household figure at average of 6 persons. If you divide 200 million by 6 persons per household that would give you 33 million households buying cooking gas on monthly basis.

This demand curves is growing that’s why many can’t see it yet. By positioning yourself now in the market is like buying Bitcoin when the price was just 1 bitcoin to 0.0003 dollars. Don’t forget that this market is dynamic. Growth can be exponential. 

 

Why Start Cooking Gas Business

I have written several articles to help you start cooking gas business in Nigeria. You can see most of them when you search the content on cooking gas in this blog. There’s so much insight to get from each of the articles I have written on the subject. But this one is fresh reasons I would encourage anyone to start cooking gas business now. 

Although, I will still give more details on my reasons but I want to just list them out for you to see:

  • 9,000 filling stations approved by government to sell LPG
  • NNPC to build gas plants nationwide
  • Government to approve free cylinder for Nigerians 
  • Price of cooking gas set to fall
  • DPR lowers licensing fees

These are just a few reasons I can share with you now because they are recent happenings. There are a lot more reasons you should be investing in cooking gas business now. 

9,000 Filling Stations Approved

This may sound like it’s no news, but I tell you, it’s the biggest news in LPG industry. Government is pushing to deepen the consumption level of cooking gas and that should impress you. Gas would soon overtake petrol in the country. Some may laugh this off, but wait till you read my article on The Huge Benefits Of LPG Powered Cars. This articles would expose to you the reason gas would takeover our cars from petrol engines. 

So, the government wants to hasten the speed for LPG adoption in the country by approving its top 9,000 filling stations in the country to adopt LPG refilling. And that’s just 37 percent of the total number of approved filling stations by DPR. According to DPR, these stations are those with the required capacity to add LPG in their existing stations. 

 

The other 63 percent are also not left out. Let’s assume that the number of filling stations that make up this 63 percent are 17,900. That means in total we have about 26,900 stations nationwide. If all these have LPG installed, it’s huge and would force the adoption in just a few years time. 

NNPC Is LPG Stations Nationwide

If you think it will just end with independent filling stations, you are going to be shocked. Government is not leaving everything to just independent stations. NNPC and its franchise partners are also joining the train. 

Imagine how spread NNPC stations are, and what would happen as they open up new outlets and sign new franchise deals. As an investor it should be making you think how to leverage on cooking gas growth. 

The Free Cylinder Project

You should be acquainted with government plan to make cylinders free of charge (FOC). That project is not dead, it’s coming alive soon. As the country plan a switch from petrol to gas, its firing its drive on all cylinders. 

There’s a huge advantage from this free cylinder project. It will drive the adoption of LPG gas by making it easier for every household in Nigeria to switch to cooking gas.

This would increase exponentially the demand for cooking gas. That’s a huge return on investment for gas plant owners. 

Falling Price Of LPG

The whole reason for the drive for LPG adoption is to bring down the price. Due to low adoption level, it cost more to distribute the product across the country. There’s limit to the quantity to be made available for consumption. 

But as demand explodes, more investors like the Dangote refinery and Master Energy Petrochemical would emerge. The volume of LPG available would increase, and the competition to sell more would drive down the price. 

DPR Lowering Licensing Fees

Also, what’s more interesting for investors is the sudden love from DPR. Inasmuch as DPR would not want to compromise on its requirement on how to start cooking gas business in Nigeria, it has lowered most of its fees to drive adoption. 

Here’s a list of DPR requirements in terms of finances. The breakdown is in two options:

  1. Cost requirement for setting up standalone gas plant
  2. Cost requirement for setting up gas plant in filling station

Standalone Gas Plant:

  • DPR Approval: N300,000
  • Police Report: N150,000
  • Fire Service Certificate: N50,000
  • Authority to Construct (ATC): N400,000
  • Tax Clearance Certificate : N50,000
  • Tank Data Sheet: N100,000
  • Environmental Assessment: N600,000
  • Sundry : N400,000
  • Total: N2,000,000

Using A Petrol Station:

  • LPG Add-on License: N300,000
  • Fire Service Certificate| N50,000
  • Police and EIA: N100,000
  • Authority to Construct (ATC): N50,000
  • Tax Clearance Certificate: N50,000
  • Tank Data Sheet: N100,000
  • Sundry : N250,000
  • Total: 900,000

Note: some of the requirements mentioned above can be personally obtained by you to save cost. Yes, these rates are based on using an agent or consultant. It can save some small cost by doing some yourself. Like, police report and fire service approval.

Conclusion

One thing to takeout from all these is that LPG would takeover from petrol. That’s not just an imagination, it’s going to happen so fast. I give it just few years from now if government didn’t relent in this new drive for LPG adoption. 

And to use LPG to run cars it would increase the demand for cooking gas and it will overtake petrol. This is what the government want to achieve. To reduce dependent on petrol and start consuming the abundant gas resources in the country. Because gas is not imported and it’s being extracted naturally, requiring no refining.

All these would happen in a short time. As an interested investor, you should not procrastinate now. The race to take up slots in LPG plant investment is now. If you miss this first rush, the second rush may not be easier. I can imagine DPR would tighten its requirements once substantial quantity of LPG is being consumed in the country. 

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