Gas Refilling Business Plan in Nigeria

Gas Refilling Business Plan in Nigeria

Executive Summary

NobleGas Energy Solutions is a proposed liquefied petroleum gas (LPG) refilling business to be established in Port Harcourt, Rivers State, Nigeria, focusing on the retail and distribution of cooking gas to households, restaurants, and small businesses. The business will operate a 5-ton LPG refilling plant, capitalizing on Nigeria’s growing demand for clean cooking fuel. With an initial investment of N10 million, NobleGas projects an annual revenue of N24 million by Year 2, with a 25% profit margin, achieved through efficient operations, safety compliance, and strategic marketing.

Business Description

  • Business Name: NobleGas Energy Solutions
  • Location: Port Harcourt, Rivers State, Nigeria
  • Business Structure: Sole Proprietorship
  • Industry: Energy (LPG Retail and Distribution)
  • Description: NobleGas Energy Solutions provides safe and reliable LPG refilling services, offering various cylinder sizes (3kg, 6kg, 12.5kg) to meet the needs of households and businesses. The company emphasizes quality service, safety, and accessibility to promote clean energy adoption.
  • Address: Km 5, East-West Road, Rumuodara, Port Harcourt, Rivers State, Nigeria
  • Official Website: www.noblegasenergy.ng
  • Social Media Accounts:
    • Instagram: @NobleGasEnergy
    • Twitter: @NobleGasNG
    • WhatsApp: +234-906-890-1234
  • Founder and Owner: Chukwuma Nwankwo, an energy entrepreneur with 8 years of experience in the oil and gas sector.
  • Vision: To be a trusted LPG refilling brand in Nigeria, promoting safe and affordable clean energy solutions.
  • Objectives:
    1. Establish a 5-ton LPG refilling plant within 6 months.
    2. Serve 1,500 customers monthly by Year 2.
    3. Secure partnerships with two major retailers by Year 3.
    4. Achieve a 25% profit margin through streamlined operations.

Market Analysis

Industry Overview

Nigeria’s LPG market is expanding, with consumption surpassing 1.5 million metric tons annually, driven by government policies promoting clean cooking to reduce reliance on kerosene and firewood. Port Harcourt, a key oil and gas hub, has a high demand for LPG due to its urban population, commercial activities, and proximity to gas depots. Despite growth, supply gaps, safety issues, and inconsistent service quality create opportunities for reliable refilling plants.

Target Market

  • Households: Urban and peri-urban families using LPG for cooking.
  • Restaurants and Caterers: Commercial kitchens requiring bulk gas supplies.
  • Small Businesses: Enterprises using LPG for heating or small-scale production.
  • Retailers: Gas shops and supermarkets reselling refilled cylinders.
  • Institutions: Schools and hospitals needing LPG for catering.

Competitive Analysis

The LPG refilling market is competitive, with both large players (e.g., NIPCO, TotalEnergies) and small-scale vendors. Many competitors struggle with unreliable supply, poor safety practices, and limited customer reach. NobleGas will differentiate through consistent supply, adherence to safety standards, competitive pricing, and a strong digital presence targeting urban consumers.

Operational Plan

Location and Setup

  • Site Selection: A 0.5-hectare plot in Port Harcourt with road access and proximity to LPG depots for efficient supply.
  • Facility Setup: Construct a 5-ton LPG refilling plant with safety features like fire suppression systems, gas detectors, and proper ventilation (N4 million).
  • Utilities: Install a backup generator (N800,000) and water system for safety operations (N400,000).

Equipment and Supplies

  • Equipment: 5-ton LPG storage tank (N2.5 million), filling scales and pumps (N1.2 million), safety equipment (fire extinguishers, alarms, N400,000), delivery motorcycle (N800,000).
  • Cylinders: Purchase 100 cylinders (3kg, 6kg, 12.5kg, N1.2 million initial stock).
  • Gas Supply: Source LPG from licensed depots in Port Harcourt (N1.5 million initial stock).

Operations Workflow

  • Gas Procurement: Purchase LPG from Department of Petroleum Resources (DPR)-approved depots.
  • Filling Process: Refill cylinders using automated pumps, ensuring accurate weights and safety checks.
  • Storage: Store LPG in secure tanks with regular maintenance to prevent leaks.
  • Distribution: Sell directly at the plant and deliver to retailers, households, and businesses.
  • Services:
    • LPG Refilling: Refill 3kg, 6kg, and 12.5kg cylinders for households and businesses.
    • Cylinder Sales: Sell branded cylinders with initial gas fill.
    • Bulk Supply: Deliver large volumes to restaurants and institutions.
    • Delivery Services: Direct delivery to clients in Port Harcourt and nearby areas.
  • Price Range:
    • LPG Refilling: N800–N1,000 per kg (e.g., N10,000–N12,500 for 12.5kg cylinder).
    • Cylinder Sales: N5,000–N15,000 (3kg–12.5kg, including first fill).
    • Delivery Charges: N1,500–N4,000 per trip within Rivers State.

Staffing

  • Plant Manager: Oversee operations and ensure safety compliance (N80,000/month).
  • Technicians: 2 staff for filling and equipment maintenance (N50,000/month each).
  • Delivery Staff: 1 rider for deliveries (N40,000/month).
  • Sales/Marketing Staff: Manage customer relations and promotions (N40,000/month).
  • Owner: Chukwuma Nwankwo to oversee strategy and partnerships (N80,000/month).

Financial Plan

Startup Costs

  • Land Lease (0.5 hectare): N800,000
  • Plant Construction: N4 million
  • Equipment (tank, pumps, safety): N4.4 million
  • Delivery Motorcycle: N800,000
  • Cylinders (100 units): N1.2 million
  • Initial LPG Stock: N1.5 million
  • Utilities (generator, water): N1.2 million
  • Labor (1 year): N2.88 million
  • Marketing and Branding: N400,000
  • Miscellaneous (permits, licensing): N400,000
  • Total Startup Cost: N10 million

Revenue Projections

  • Monthly Sales: 3 tons of LPG (3,000 kg at N800–N1,000/kg retail).
  • Monthly Revenue: 3,000 kg × N900/kg (average) = N2.7 million.
  • Annual Revenue: N2.7 million × 12 = N32.4 million.
  • Profit Margin (after 75% operating costs, including gas procurement): N8.1 million/year.

Break-Even Analysis

  • Break-Even Point: Recover startup costs within 12–15 months, assuming consistent sales and efficient operations.

Marketing Strategy

  • Social Media Marketing: Use Instagram and Twitter to promote safety, reliability, and customer testimonials. Budget N40,000/month for targeted ads.
  • Direct Sales: Operate a retail counter at the plant for walk-in customers.
  • Partnerships: Collaborate with restaurants, hotels, and gas retailers for bulk orders.
  • [su_button target="blank" style="soft" background="#e70003" size="9" radius="5" icon="icon: link" desc="𝚌𝚕𝚒𝚌𝚔 𝚑𝚎𝚛𝚎"]VISIT WEBSITE[/su_button] Develop a user-friendly website for product listings, pricing, and order placements, optimized for search terms like “LPG refilling Port Harcourt.”
  • Promotions: Offer discounts for first-time customers and loyalty programs for repeat buyers.

Risk Analysis

  • Supply Chain Disruptions: Secure contracts with multiple LPG depots to ensure consistent supply.
  • Safety Risks: Adhere to DPR regulations, conduct regular safety audits, and train staff on handling procedures.
  • Price Volatility: Monitor LPG market prices and adjust retail prices to maintain margins.
  • Competition: Differentiate through reliable service, branding, and fast delivery.

Conclusion

NobleGas Energy Solutions aims to capitalize on Nigeria’s growing LPG demand by establishing a reliable refilling plant in Port Harcourt. With an initial investment of N10 million, the business projects a first-year revenue of N32.4 million and a profit of N8.1 million. By leveraging strategic location, modern equipment, and robust marketing, NobleGas is positioned to become a trusted LPG supplier, contributing to Nigeria’s clean energy adoption and economic growth.

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