How To Start LPG Gas Business In South Africa
What is an LPG Gas ?
Liquefied petroleum gas is a fuel gas made of petrol which contains a flammable mixture of hydrocarbon gases, most commonly propane, butane, and propylene.
How To Start LPG Gas Business In South Africa
1.Draft a Business Plan
It is essential to have a business plan for any business idea. It helps you put down your goals and track them over time. It is also important for evaluating business models like the analysis of various operational aspects for the success of any business. Make sure to include business location, startup costs, market segmentation, cashflow projections, risks, strengths and weaknesses of the business.
2.Acquire the Necessary Licenses and Permits
Energy Regulation Commission License
To get the Energy Regulation Commission license in Kenya, you need to provide your business location and indicate your gas supplier. You must also meet the safety requirements for LPG to avoid disasters like fire.
Trading License
Just like any other business, you need a trading license to start a retail gas business. You can obtain one from your local authority or county government offices.
Fire License
Fire licenses are taken as a proof that you meet the requirements to avoid fires and in case of fires, you can control it. As such, you need to have fire extinguishers.
3.Assess the LPG Market
Before you can start an LPG retails business, you need to assess the market needs. For example, determine if people near you are using cooking gas in their households. In this case you can start cooking gas business in Kenya. Also, get to know the weight that is commonly used by a majority of people. In most places, 6kg gas cylinders are fast-moving.
4.Find a Good Business Location
A good business location for LPG retail business in Kenya is near residential areas. Also, densely populated areas do well for LPG gas. In towns, most people use cooking gas in their household, unlike in rural areas where a majority of people use firewood and kerosene. Ensure that the area your business is operating in there is no unhealthy business competition. Having suppliers near you is a factor to consider to avoid high costs when transporting gas cylinders.
5.Advertise Your Cooking Gas Retail Business
It would be best if you advertised your cooking gas retail business for potential customers to know about the existence of your business. The most excellent way to advertise your business is through the use of stickers. Design good business posters and stick them at the entrances of residential areas and electricity poles. Ensure to indicate the business name and contact details. When people need a refill, they will call you to deliver.
Frequently Asked Questions (FAQs).
Is LPG 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 business in South Africa?
Initial investment of approximately R250,000 – depending on LPG marketer, storage capacity, equipment agreement, working stock, cylinder deposits and your business plan.
Is gas refilling business profitable in South Africa?
Cooking gas business is very profitable and you don’t have to break the bank before you can start. With N300,000, you will get your business setup and ready to go with almost everything necessary in place. And this is a big business that anyone who is into it can be proud of.
How much does a petrol station cost 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.
How do I sell petrol in South Africa?
You must apply to the Department of Mineral Resources and Energy for a site and a retail license if you want to buy or sell petroleum products to members of the public. Please note: A retailer is allowed to purchase petroleum products from a licensed manufacture or wholesaler only.
What business is in high demand in South Africa?
In countries like South Africa, car care products and accessories are in high demand. You can start a business of car accessories with some investment and the profits will be moderate. The only thing you need to focus is that the quality of products.
Which petrol station is the best in South Africa?
South Africans have voted Engen their favorite petrol station for the tenth consecutive year in the 2020 Sunday Times Top Brands, validating Engen’s customer centric strategy, marketing focus and commitment to keeping South Africans safe during the COVID-19 pandemic.
Do I need a license to sell LPG gas in South Africa?
Any person who wants to sell prescribed petroleum products in bulk to other licensed wholesalers, retailers and end consumers (for own consumption) including those who are currently buying and selling prescribed petroleum products in bulk must apply for a wholesale license.
Is selling petrol in South Africa illegal?
To sell petroleum products in South Africa, you must be in possession of a Retail or Wholesale license depending on the space you are interested in operating in. To transport and deliver fuel, are required to know, and understand that National Road Transport Act.
Which industry pays the most in South Africa?
The electricity, gas and water supply industry had the highest average per month salary at R54,881, followed by the total non-government sector (R32,907) and then community, social and personal services (R32,172).
What is the biggest fuel company in South Africa?
The data shows that Engen has the largest network in the country with just under a thousand stations across South Africa. It is followed by Caltex (683 stations) and Shell (637) stations.
How much does a petrol station cost 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.