Oil and gas business is one of the most lucrative business in Nigeria. People are making billions of naira annually and the money in the industry just seem endless! Supply of Diesel also known as AGO (Automated Gas Oil) and Lacasera(cooked oil) is one of the most profitable business in the Nigerian oil and gas industry.
As usual, I am going to share the findings with you so that you too can tap from the wealth in this sector.
Reasons Why supply of diesel is a good business
You know the quality of power supply we currently get in this country? It is nothing to write home about! All the giant diesel generators that power most of our industries run on diesel. MTN alone is said to have over 6,000 diesel generators that power all their base stations across the country and they run on average of 20 hours daily.
If each of those generators consumed 50littres for the 20 hours daily, that will be a total of 50 x 6000 = 300,000 Litres of diesel daily! In a month, MTN generators alone would have consumed 300,000 x 30 = 9,000,000 Litres of Diesel. What a waste!
Now multiply the above figure by all the four GSM Network operators in Nigeria, all the twenty something banks and their branches, tractors and caterpillars of construction companies, all the factories, all the agencies and organization, all the media houses, and all the homes that runs almost 24 hours on generators! Needless to tell you that billions of litres of Diesel are avoidable burnt everyday in Nigeria.
In business and supply sense, the best product to deal on is the product that is in high demand. That makes diesel product one of the very product of choice when it comes to Nigerian oil and gas supply business.
Another good thing about Diesel supply business is that it is less complicated and less expensive compared to that of PMS because – Diesel is easier to store and transport due the fact that it is less flammable, unlike PMS that could catch fire from a distance and requires more elaborate storage system that cost fortune.
One of the best part of the business is that you basically do not need to store the product, all you need to do is to market your customers and supply on demand, cash your money and smile to the bank! You can even do the business on a small scare without keeping an office. However, to operate on the standard we are talking about, you must get an office. Don’t get me wrong – Diesel business is a serious business and requires careful planning.
If you get it right believe me, there is millions of naira waiting for you in this business – the issue of profit is like 120% guaranteed. Go ahead and invest provided you have the required capital.
Profit potential for Diesel Supply Business
Just like every good business, there is money to be made in Diesel supply and profit is always there. We are going to base our calculation per litres per truck. You can get 33,000 litres of Diesel from major distributors and NNPC at N2.5 at the unit cost of N78 per litres.
A truck of 33,000 liters of Diesel to retailers like Filling Stations supplied at unit cost of N88 will give you a profit margin of N10. In that case, you will be generating profit of 33,000 x N10 = N330,000 from each supply. That is the lowest profit you can make – profit for 33,000 litres are sometimes up to a million naira.
When you multiply that to how many trucks you are able to supply in a month, you will find out you are in money. The secret to success in diesel supply business in marketing. Expand your horizon, talk to as many companies and individuals as you possibly can. The more you supply, the more profit you make.
In all, a medium scale Diesel supplier that puts everything properly in place makes between 3-5 million naira monthly after expenses. Isn’t that great? 5million naira monthly is a good business by all standard, so go ahead and give it a go!
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