Energy Market

How to Tap Into Cooking Gas Business Opportunities

Mini cooking gas businesses

Do you want to make money from cooking gas business opportunities? Do you know that cooking gas will soon become the only cooking fuel in every home in Nigeria? Think about the population of Nigeria and the huge daily consumption of cooking gas.

If you are thinking of the business to invest into right now, there are many cooking gas plant business opportunities to explore. Do you want to know why? Here are the facts you should invest in cooking gas business now:

  • 198 million Nigerians eat food cooked daily
  • Over 50 million families now cook with gas (and still counting)
  • Cooking gas is cheaper than kerosene (more families are finding out now)
  • Cooking gas stove is affordable
  • Even millions of Nigerian students use cooking gas in schools nationwide
  • Cooking gas last longer, is cost effective and cooks food faster than kerosene
  • The demand for cooking gas and gas products are at the peak now

Now is the right time to invest in cooking gas business. But you need to know how to start your investment, what to invest in and how to manage a profitable cooking gas business. Also, there is an aspect of cooking gas business that enjoys some form of monopoly.

Introduction to Cooking Gas Business

The reason cooking gas is most profitable business now is because it has to do with food. Everyone eats food. It’s the most important need in everybody’s life. And no one eats food that is not cooked. If cooking food before eating is important, then everyone would ensure that food is cooked before eating.

That makes cooking gas business is huge opportunity for investors in Nigeria. If you study cooking around the world, cooking gas is the only cooking option available worldwide. It will soon be so too in Nigeria. It has already started.

But don’t wait till then before you invest in it. The time to invest is right now. The potential is huge and the return on investment is equally high. Even higher than petrol business. While petrol station can sell a liter of fuel with just N5 profit margin, a gas plant sells with up to N50 for the same liter in KG.

Related: A Complete Beginner’s Guide To Start Cooking Gas Plant Business 

How Cooking Gas Business Works

Even though everyone might be interested to invest in cooking gas business, there are some cooking gas business that everyone may not be able to invest into. That means there are several other cooking gas business that can fit your dream and budget.

There are several value-chain in cooking gas business. and each one is a huge potential to invest in. Although you will require substantial funding to start cooking gas business profitably, there are also ways to start with little capital.

Here are a list of opportunities in cooking gas business you can start:

  • LPG Importation
  • LPG tank farm operation
  • Cooking gas logistics business
  • Cooking gas plant operation
  • LPG equipment maintenance and servicing
  • Cooking gas wholesale distribution
  • Cook gas tank construction and installation
  • LPG products and accessories

However, I will only be explaining in details on cooking gas plant business in this article. I will also write other articles on cooking gas business that will include the other opportunities in dues time.

Challenges of Cooking Gas Business

Before you finally decides to in eat in this cooking gas business, it’s important you also know what could be the challenges you might face and possible solutions to deal with them appropriately.

Here are the list of currently foreseen challenges in cooking gas business:

  1. High startup capital outlay
  2. Delays in government approvals and demand for bribes
  3. Finding the perfect location for your business
  4. Maintaining readily supply of cooking gas
  5. Retail price instability
  6. Gas leakage and losses
  7. Startup mistakes and mismanagement

Starting a cooking gas business requires good funding, especially if you are investing in a gas plant. You need to understand the required capital outlay before venturing into the business. And if you are borrowing to setup, you need to understand the delay for approvals, and all the basic requirements needed.

Also, a good location is important for cooking gas business. This can be handled by having a professional packaged feasibility study and business plan. If you fail with location, your investment is as good as dead.

Once you have the necessary approvals and the right location, then it’s time to build and receive gas supplies. The right construction Company should handle your gas tank to prevent leaks and losses. Also, a good suppliers eliminate the problem of buying from middlemen and having to face retail price crises.

 

 

High Startup Requirement

The cost of starting any cooking gas business doesn’t come cheaper. Its capital intensive and might require funding from investors or financial institutions. Moreover, the Central Bank of Nigeria (CBN) also mapped out funding program through the banks for the gas downstream sector. The funds are available through your bankers.

Delays in Approvals

Another challenge that you may face is delays in licensing approval. Cooking gas or LPG business is one that requires operational approvals from different government agencies like fire service, town planning or ministry of lands and environmental, security agencies, ministry of petroleum, etcetera.

And these approval can cost lots of money. Yet, they don’t come so easily and on time.

Finding Suitable Location

Finding suitable location for LPG is a challenge. Its not just about suitability, you will also have to contend with cost. The high cost of land now is discouraging investors in the LPG downstream sector. The location is also key to most LPG business success.

Maintaining Supply of Cooking Gas

For some of the LPG businesses, maintaining supply of the product can be a challenge. Sometime availability has been a challenge. Nigeria is not yet self reliant on LPG supply, as a high percentage of our LPG needs are met through LPG importation.

Retail Price Instability

For now, price instability remain a huge challenge for LPG business. Recently, there has been unprecedented increase in LPG retail price. Its affecting the market and forcing most users to stop using LPG for cooking.

Gas Leakage and Losses

Another consideration is the issue of loses, which is mostly a result of leaks and theft. Although the issue of leakages can be curtailed by ensuring proper maintenance and replacement of faulty equipment. But that of theft is a huge challenge that cannot be easily address with proper measures.

Startup Mistakes And Mismanagement

If you want to start a cooking gas plant, you need to have some proper knowledge of how the business works before investing your money. I don’t mean university education and it shouldn’t be street guess information either.

The least you should do is attend cooking gas business seminars and workshops to learn basic knowledge in the business. Don’t disregard this kind training even if the cost seem high to you.

If you can invest millions in a business that you know little of and. Or afraid you could lose the money, what is N500,000, if that’s what it cost to get some proper knowledge before investing your money.

Don’t make the mistake of thinking you know enough to get started if you haven’t learnt what experts know about the business. And like I have already showed you, a cooking gas business plan and a feasibility report is a veritable source of information that could be customized to your cooking gas plant location.

Conclusion

Every Cooking gas business is highly lucrative. But you cannot succeed in it without the right knowledge about how the business works. One of the biggest secret in cooking gas business is viable location. If you have the right location, you have a profitable business.

Furthermore, you need the knowledge of the industry before venturing into it. Lacking proper knowledge of the business would cost you a lot.

IMPORTANT LINK:

How to Pick Most Viable Location For Cooking Gas Plant

Chinedu David
About The Author: Chinedu David An inspiring writer with several years of experience in journalism, consulting and training. Worked with Success Digest magazine for over a decade. Founded MyStore - an online store in 2013. Trained several startup entrepreneurs in telecom sector, LPG (oil & gas), and on Cryptocurrency investment. A born again christian, who's committed to spreading the gospel of Jesus Christ with passion. Drop a comment below and he will respond to your query. He can also be reached via email: nedu@myblog.com.ng or Call/Text/WhatsApp: 07087770518
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