How to Start the Cooking Gas Business in Nigeria

Cooking Gas Business in Nigeria: A Complete Guide to Success

How to Start the Cooking Gas Business in Nigeria

It is no news that Kerosene is now more expensive than cooking gas, and no one can stay without food. So, cooking is a must one way or the other.

And even those that buy food from eateries contribute more to the high demand for cooking gas than those who cook at home. You can ask me in the comment question if you don’t understand how.

So with the daily increment in the price of kerosene in Nigeria, the cooking gas business has now become one of the lucrative businesses to venture into in Nigeria because of the shift in demand from kerosene to cooking gas.

As I do say;

As lucrative as any business in this world could be, you must understand that the knowledge aspect of that business choice is more important than the capital you've gathered from collective effort or from your life savings.

In this article, I will be showing you how to start a cooking gas business in Nigeria and also how to make good profits monthly.

How profitable is the cooking gas business in Nigeria

The cooking gas business is profitable in Nigeria as you can make as high as N300,000 monthly within your first three months of starting this business.

But like any business, there are factors to consider that can influence its profitability. It’s crucial to be aware that unexpected events can occasionally throw a wrench in your profit-making machine.

Imagine a scenario where there’s a sneaky leakage of gas or an unfortunate hosepipe busts, causing some wastage. In such cases, you might break even or experience a minor loss. It’s just a part of the game.

But fear not! With proper safety measures in place and vigilant management, these hiccups can be minimized, ensuring that your cooking gas refilling business remains a profitable venture.

So, if you’re seeking a business opportunity that can fill your coffers while serving a vital need in the community, look no further. The cooking gas refilling business in Nigeria is ready to ignite your entrepreneurial journey and fuel your success.

Calculation of the Profitability of a cooking gas business on a small scale

There are different Kg of gas cylinders you can start with, in this business. They range from; 50kg, 25kg, 20kg, 12.5kg, 10kg, etc.

Let’s assume you choose to start with 12.5kg (which obviously is the most popular kg), each time you fill this cylinder you can make as much as 500 Naira when you sell it to consumers as a refill.

If that 500 Naira is maintained for ten days, that is 5k for you.

But we both know you definitely going to refill more than one 12.5kg cylinder in a day.

The price to fill a 12.5kg at the depot varies a lot but it mostly falls below 3,500. So let’s say you fill at 3,500 and you sell at 4,000niara to consumers, this gets you 500 Naira as profit.

This means if ten persons come to get gas from you in a day, it gives you 5,000naira as profit.

So the monthly profit will be 5,000 x30 = 150,000niara

If your location is right, you can expect as high as, 20 to 30 people a day.

A filled cooking gas cylinder is expected to last for at least a month that’s if the person barely cooks. but if it is someone who cooks a lot, it is expected to last for a minimum of 2 weeks.

Meaning, you are rest assured that the probability of your customers coming back that same month for another refill is high. That also implies that you will be making more than 150k monthly.

Note: Due to the consistent fluctuations of Gas prices in Nigeria, the quotation I used in my calculation might be wrong at the time you are reading this article. But your profit is always sure to be N500 and above per every 12.5kg refill no matter the gas price.

How to Start the Cooking Gas Refilling Business in Nigeria

1. Capital

You can start this business with as low as 300,000 Naira on a small scale and in one month you can recoup as high as 150,000 Naira as profit which gives you a 50% return in one month.

Very few businesses can give you a 50% return in one month, which makes it a very profitable business to engage in.

But if you intend to go on a Large scale, N5,000,000 to N10,000,000 will be able to start this business successfully.

2. Location 

In Location, there is one most important thing you must consider, or else you will be wasting your time doing this business.

When it comes to finding the right location for this business, the first thing that comes to people’s minds is to look for the busiest area to set up their cooking gas business.

That might work for those who want to set up a Gas plant business but not a retail LPG business

If you stick to that mentality, you might end up missing out on the lucrative aspect of this business.

Such a place will give you publicity as a retail cooking gas business owner, not money. And that is not the aim of any businessman.

The question now is where can we set up our cooking gas business?

An area that is residentially dense is the best place to set up your cooking gas business.

Meaning your location necessary doesn’t need where there are other businesses, all it needs is where people reside.

The surprising thing about this business is, where people reside more is often the less busy or even most quiet place.

Even with the quietness, it has more potential to provide you with the maximum profit you desire than those busy areas.

How to spot an excellent location for your cooking gas business?

  1. Must be Residential
  2. Where there is no land space or very little land space not occupied by residential buildings.
  3. Make sure People live in that location because there are some residential locations with many houses, but few occupants.

Emphasizing number 3, there are some locations; “mostly newly developed areas”, where you see endless numbers of completed buildings, furnished but no occupant.

Areas such as that have the potential to bring in high profit but the only price you will have to pay is; “patience”.

The reason why is patience is that it can only be profitable to your business when people start occupying those houses.

But if you want instant cash flow in this business, I advise you don’t set up in such an area, as it will yield little or no returns.

Important advice; “this is not a recharge card business you do under an umbrella, (like I see some people do in Lagos). You must have a shop even if it’s just a caravan.

The reason is that your gas cylinders need to be kept safe in a place after closing for the day. Not on a to and fro transportation (from house to your business location) every day.

3. Buying your Gas from the depot

It is one thing to buy gas and another to sell.

So as a retail seller that you are, you must recognize that you are also a customer to direct dealers.

There are several gas depots you can get your refill from and they are very easy to locate due to their obvious gas plants.

And besides, petrol stations are now in the gas depot business. So in case, you are finding it difficult to locate a depot, you can locate a filling station that has a substation for cooking gas to get a refill.

4. Knowledge of Operation

After those whole areas have been touched, 4 basic knowledge are important, and without them, it is impossible to even begin this business.

  1. How to Fill gas cylinders
  2. How to refill gas cylinders
  3. How to transfer gas from one cylinder to another
  4. How to take the exact measurement of a gas Cylinder before and after filling it.
  5. How to change the cylinder valve

Those 5 things can only be gotten through a one-on-one practical. This means you must look for someone to teach you or someone you can work with for at least a month.

A month of training under someone or working for someone is long enough to learn everything about the cooking gas business.

With all this knowledge put together, you are good to go start your Liquefied petroleum gas (LPG) business in Nigeria as a refiller.

There is a golden rule in business that you must always put in mind;

The only people you can call your customers in business are only returning customers, not first-time customers.

Two major factors play a role in customers returning back to your service; Honesty and not being a greedy businessman.

6. Business Registration

To operate your cooking gas business on a large scale, it is crucial to register it with the Corporate Affairs Commission Of Nigeria (CAC).

This registration will establish your business as legitimate and prevent any potential issues with government authorities.

5. Get your License from the Department of Petroleum Resources (DPR)

Imagine this: You’re ready to kick-start your cooking gas business in Nigeria, but before you can wield that coveted DPR license, there are a few things you need to take care of. Especially if you’re operating on a larger scale, it’s essential to dot all the i’s and cross all the t’s.

So, let’s dive into the nitty-gritty.

First things first, you’ll need to approach the DPR (Department of Petroleum Resources) to obtain a comprehensive copy of the terms and conditions associated with their licensing process.

Now, here’s the exciting part: you have options! You can either visit their office in person, where you’ll get personalized assistance, or head over to their online website for all the essential details at your fingertips.

Now, let’s talk about the prerequisites for obtaining that precious DPR License. Brace yourself, because here’s the checklist:

  • You’ll need a police report,
  • Fire planning approval,
  • State land documentation,
  • Physical planning permit, and
  • Town planning permit.

Think of it as a collection of golden tickets that will unlock the doors to your cooking gas business.

So, before you can proudly display that DPR License, make sure you’ve covered all your bases. Gather the necessary documents, fulfill the requirements, and remember, the DPR is there to guide you through the process.

So, gear up, aspiring cooking gas entrepreneurs! Take the necessary steps, follow the guidelines, and soon enough, you’ll be on your way to obtaining that sought-after DPR License, propelling your cooking gas business to new heights in Nigeria.

7. Insurance

Obtaining insurance for your cooking gas business in Nigeria is highly recommended due to the inherent risks involved.

Having insurance coverage will provide significant assistance in the event of unexpected situations.

The risk involved in the Cooking Gas business

1. Fire Risk

The biggest risk in this business is; “fire explosion”.

But that being the case, it is very rare. In fact, I have not seen a gas station caught up in a fire in Nigeria.

But you must be careful enough to avoid risking this business with anything that can cause a spark of fire.

In addition, the location must be an open place not enclosed. The reason is that in an open field, the gas disseminates faster into the air, preventing it from having the capacity to attract fire.

2. Price fluctuation Risk

Price fluctuation may become a problem mostly for your customers. At first, when you tell them the price has gone up they may feel you want to extort them.

The high price can also affect your profits because there is what we call; “a benchmark in price” in any business.

If your selling price becomes high as a result of the high buying price, it might make your customers seek other sellers to confirm the new price.

And if by any chance, they discover a seller with a lower price it means they are done with you.

So how to overcome this situation is by you sacrificing your 500naira profit. it might mean you lose 200naira out of the 500nair for only that month’s sales.

When other new customers start coming to enquire about the new price and they discover your price is a bit lower than others they will become your own customer.

But the amazing thing is, it doesn’t happen often. In fact, it rarely happens.

Conclusion

I hope you have benefited from this article: “Cooking Gas Business in Nigeria”?

Do you have questions or contributions? drop them in the comment section below.

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78 Comments

  1. Thank you so much for the information, honestly, I have been looking for this opportunity so long, and again I want to start this busindaess, gas refill plant.

  2. Thank you so much for this inspiring business tips on LPG retail sale . My question is you did say that we need as little as #300,000 to start up this business , is the cost of the empty gas cylinders inclusive in d #300,000 ?

  3. Good morning. Please as regarding the DPR policy regulation of LPG cylinder-to-cylinder rebottling, refilling and decanting being prohibited. How do one go about it.

  4. I really appreciate this information

    Pls I wish to connect with you to make more enquiries… Can I have your contact ?

  5. Thank you sir i really appreciate this wonderful teaching.
    Will a person that is about to start the business meet the fire service office for approval and registration before he can start, thank you sir and that’s my question.

    1. That is not applicable in my state. I don’t know about yours….so please do well to confirm from existing dealers in your state before you commence.

  6. Wow I like this.. thanks alot boss.
    But what about me that is having 50k to start. What should we do sir.

    1. You can start with liitle kg, but is going to stress you because you will be running out of gas frequently.

      But half bread they say is better than none.

    2. You can start with little kg, but is going to stress you because you will be running out of gas frequently.

      But half bread they say is better than none.

    1. I believe i gave an estimated cost in the article. but for where to get your cylinders you can ask those retailers or go to a depot and ask.

  7. Thanks for the update I really appreciate. My question is, is there any registered body or agency that I need to meet.

  8. thanks a lot bro for this article.. God bless you richly. so consulting the DPR agency and obtaining a certificate of operation is a compulsory procedure?

    1. If it is applicable in your state as a retailer, then it is mandatory. But as a wholesale dealer, it is mandatory.

  9. This very informative, I’ve been searching for something like this for some couple of months.
    Thank you very much for the time and knowledge you’ve put together to be able to come out with this.

    I have the desire to start this business but in bigger way whereby there’s gonna be a gas pump like that we normally have in the fuel station and a big container that’s gonna contain the gas. My question is that do you have any idea of how much these things are going to cost?

  10. bros, thanks for the information….. please can you tell us all necessary equipment needed to start a cooking gas business

    1. you will get access to that during the on the job training. That is why I recommend going to apply to learn at any gas station

  11. Thanks a lot this is exactly what I was looking for , my questions is , I have 100k I don’t know if it will be enough to buy 3gas cylinder and the gas scale for a start

    1. With the current prices in the market, I can’t tell.
      But 100k is a good capital to start with but it will be on a small scale.

      Sorry, that my reply is coming late, I was occupied with work and I was a bit ill but am ok now.

  12. This is helpful thank you and God bless.

    My question is can I really start this business with 100k and what are the loosing side of this business.

    1. Yes, you can start with 100k.

      The losing side is when you refuse to go through the practical knowledge, by not signing up or not working with someone who is current into the business.

  13. Thank u so much for this information .my question is how much profit can a retailer make in 50kg ,like how much will a dealer sell to a retailer and how much does a retailer sell to consumer ,I need to understand how much profitable the business is ,pls don’t be angry about my question

    1. I’m not angry but that knowledge you seek, you can only find in the field.
      Look for someone to learn from or employ as an employee to someone and learn the business.

    1. I already said in the article, you need a tutor. either you sign up as an employee or trainee. Look for someone close by.

  14. Thank you very much for this. Everything here is accurate, just hat things are more expensive now and the price of everything has went up. I am starting the business soon

  15. I have 1 million naira to start up the business can you please help me draft out a plan on how to go about the business…

    1. For a business plan, we dont offer such services yet, But I believe that 1 million Naira is well enough to establish a mini LPG tank. do a proper market research and business planning.

  16. Does someone that wants to start in a small scale using 300k, need all this requirements to start?
    ▪︎ Police report,
    ▪︎ Fire planning approval,
    ▪︎ State land documentation,
    ▪︎ Physical planning permit, and
    ▪︎ Town planning permit

  17. So I won’t be needing it to start on a small scale and what are the requirements for a small scale business?

  18. Thank you so much. This actually met my need. God will continue to bless you with knowledge. But my question is I’m a woman with a baby of 2konths old. I wish to do the business but my husband said i can’t do it that that its for males because of the stress. That I don’t have the energy. Please can a woman do it?

  19. Hello sir, I’m still a serving call member but I have been able to save up to 500k, will be finishing service next month, I did love to know if I can start up the business with 500k considering the cost of things now and also how to go about it. Can you please make another article on cost and set up sir

    1. 500k is enough to kick start a small cooking gas station. But as for the inflation currently in Nigeria, to get the real cost of all there is about the business, you will need someone who is into the business to put you through.

      What i normally suggest to my readers is, after getting the theoretical aspect, go and apply for a job as a gas attendant or if you have a friend that is into the business, work with him for free for about 3 months to understand the business well.

    1. LPG is the recognise name for cooking gas (Liquefied petroleum gas). but i understand what you mean; that is i meant a gas depot station or a small refile gas shop.

      In this article i focused on a small refilling gas shop.

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