How To Start LPG Business In South Africa

About applying for a petroleum wholesale licence

If you want to sell petroleum products to consumers for end-use, you must apply for a wholesale license from the Department of Mineral Resources and Energy.

The license allows you to buy petroleum products in bulk (1 500 liters or more, per transaction of petroleum products) from a licensed manufacturer, and to sell it to end-users.

The license is valid for as long as your business operates.

What you should do

Complete the form Application for wholesale license, DMRE 38.

Send the application form to the Department of Mineral Resources and Energy regional office.

The Department will send you a letter stipulating that you must publish a notice of application in four newspapers.

You must provide proof of the publication of the notice of the application to the department.

Once you have a license, you must submit information on your business annually using the Wholesale license annual information (Submission Form), DMRE 30.

How long does it take

You should receive a response within 90 days from the date when the Department received proof of publication of the notice of application.

How much does it cost

  • R1 000
  • R500 annual licence fee.

Is gas business profitable in South Africa?

Although fuel sales still make up the majority of the profits at filling stations in South Africa (according to Absa, between 80% and 90% of profits), the additional income from forecourt businesses like convenience stores, coffee shops, and restaurants, can be a nice supplement.

How much does it cost to start a gas refill business in South Africa?

An initial investment of approximately R250,000 – depending on LPG marketer, storage capacity, equipment agreement, working stock, cylinder deposits, and your business plan.

What is the price of LPG gas in South Africa?

The current LPG price is R26.66 per liter.

How much does it cost to buy a petrol station in South Africa?

A local petrol station business set up costs range in the region of R15 million and R100 million depending on the size and site.

Further to this the operation payable to the oil company ranges between R2. 5 million and R15 million, depending on the cost to develop, projected volumes, and profitability.