The evolution of the cooking gas business in Nigeria, from the sales of the product by road side vendors to the establishment of more organized and well-built cooking gas filling plants is amazing.
Several years ago, cooking gas filling plants were not common. They were scarce because many Nigerians were not using cooking gas due to the high cost of the product which made most people to go for kerosene and fire wood as their cooking fuel instead. This medium of cooking was regarded as the reserve for the rich.
However, today more people are beginning to use cooking gas instead of kerosene and firewood due to the following reasons: the product is more affordable now, it helps to cook faster and it produces little or no soot on pots. Also, it is environmentally friendly unlike the use of firewood that lead to deforestation.
Setting up a Liquefied Petroleum Gas (popularly called cooking gas) filling plant is one business that I would recommend to anyone with a sizable amount of capital. This is a business that has a ready market and the proceeds from the sales of this product is high.
This article is intended to provide you with the basic guide for establishing a cooking gas sales plant in Nigeria.
Processes involved in establishing a cooking gas filling plant.
1. Get the needed finance required – This is a capital-intensive business. To set up this business in Nigeria, you would need between 5 to 100 million naira, depending on the location you want to site the plant and the capacity of the plant you intend to build. The major cost incurred in the set up of this business is the cost of land and the cost of purchase and installation of the dispenser(s) and storage tanks(s). The cost of land depends on the location.
2. Get a land at a strategic location – The land should be well sited. It should not be too close to residential areas for safety reasons. The land should be at least 15 meters away from residential or any building that can ignite a source of fire. It should also not be too far from residential areas so that it can be accessible to customers. Most cooking gas facilities I have seen are located along major roads and they are usually fenced for safety reasons.
I have seen people establish their cooking gas filling plant on a half plot, but it is advised to get at least 2 plots of land ( as recommended by the department of petroleum resources, DPR ) in order to have enough space for the various equipment involved. I will explain the various facilities needed below.
Do not commence the building without inviting the Department of Petroleum Resources, DPR to inspect the land to ensure that it is suitable for establishing a gas filling plant and give you the permission to start construction. They will give you guidelines needed to establish the plant.
3. Get the necessary license from the regulatory bodies – This is mandatory. The major regulatory body in Nigeria for the establishment of LPG gas filling plant is the Department of Petroleum Resources, DPR. They have a detailed requirement your plant must satisfy before you will be given the approval to go ahead with the business, that is why it is advised to invite them first to inspect your site before commencement of construction of the plant.
Before construction of the plant, you need to get and submit the following approval documents to the DPR along with the approval fee so that you can be given the approval to construct: Fire service approval, town planning permit, police report, environmental impact assessment of the land, and a technical building plan of the plant.
After building your filling plant, you still have to invite the DPR for further assessment of your facility before you will be given the operating license to commence operations.
4. Build your gas plant and install the necessary facilities – there are people who specialize in building this facility and installing the equipment.
The facility should have the following:
- A horizontal gas tank/ cylinder bay fitted with water sprinklers for reducing the temperature of the tank during hot weather and pressure gauges.
- Customers gas dispensing bay with multiple filling points fitted with electronic weighing scale. The floor of the loading or filling bay should be preferably covered with wooden planks to prevent friction of the customers gas cylinders with the concrete floor which could lead to sparks and fire or explosion.
- Customer waiting area – this should be located close to the loading bay. Customers sit at the waiting area while their cylinders are being filled.
- Cashier point – this is where customers pay for gas they want to buy. It is also advised to have Point of Sale, POS machine to enable electronic payments.
- Security post – for security of the facility.
- Generator room – for alternative source of power.
5. Ensure there are adequate safety signs and equipment in the facility – LPG filling gas is a high-risk business due to the high volatility of the gas. Therefore, all necessary safety measures and facilities should be put in place.
There should be fire extinguishers strategically placed at different locations within the facility. A foam fire extinguisher is recommended. Fire extinguishers should be inspected biannually by qualified personnel. If you have the resources, I would also recommend that you incorporate a fire hydrant line within the facility. Safety signs should be visibly placed around the facility. “No smoking” sign should be clearly placed.
Cars should not be allowed to come close to the customers loading bay. Cars should be packed at least 15 meters away from the loading bay.
Check each customer’s cylinder for leakage before filling the gas. Reject leaking cylinders. Also, periodically ensure that all flanges in the gas pipeline are checked for leakages using a portable gas meter.
There should be no loading of customers cylinders during mobile truck discharge of gas to your gas storage tank.
Your gas storage tank should be fitted with pressure gauges which should be inspected and calibrated periodically, say annually to ensure that they are working well.
Always monitor your storage tank pressure gauges to ensure that the gas pressure is within the required pressure.
Ensure that all your staff are trained on the safety aspect of the business, which includes the use of fire extinguishers and on emergency evacuation.
6. Employ competent staff – You need at least two dispensing technicians/operators who might also double as the generator operators, a cashier, a security personnel and a supervisor (you might make one of the technicians your supervisor).
7. Buy your gas from reliable source – Contact reliable suppliers and with time you might have your own truck.
8. Advertise your business – Erect a very attractive sign board outside your facility so that people can see that you have started operations. You can also advertise via mass media.
Also ensure that you place your company sticker on the cylinders of all your customers after filling their cylinders, this is a very good way of advertisement. The sticker should bear your company name and the last date the gas was filled, and the amount of gas filled, in kilograms.
These are the basic steps you need to take to establish your own cooking gas filling plant in Nigeria. Do you have an LPG filling plant or are you planning to establish one? Let me know your thoughts using the comment section below. If this article was of help to you, kindly share with friends using any of the social media platforms at the top or bottom of the article.
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