I’m going to share with you the simple steps you need to setup a 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 is 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:
- The Basic Requirements
- 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.
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