In Uganda, how much does it cost to build a fuel station?
In Uganda, the initial investment cost for constructing a fuel station is USD 810,000. While the expense of opening a gas station may be prohibitive, the good news is that there are as many possible lenders and investors as there are potential entrepreneurs.
What does it cost to start a gas station?
Fuel provision is a necessary service (at least for the time being) that accounts for more than 6% of South Africa’s gross domestic product (GDP). It is also one of the most robust industries in South Africa, and with the right approach, it can enjoy solid earnings even during economic downturns.
How much does it cost to open a petrol station business?
The cost of establishing a local petrol station varies between R15 million and R100 million, depending on the size and location. Furthermore, depending on the cost of development, predicted volumes, and profitability, the operation payment to the oil business ranges between R2.5 million and R15 million. Then there’s the typical working capital requirements for stock and operating expenses, which might range from R1.2 million to R1.5 million. Contrary to popular assumption, when the price of gasoline rises, the petrol station does not benefit. In reality, every R1 increase in fuel price necessitates an additional R100,000 in operating capital for the average service station. The RAS (short for Regulatory Accounting System) retailer margin, as estimated by the Department of Energy, is insufficient, and there is an under recovery of roughly seven cents per litre. What this all boils down to is that while a petrol station’s massive start-up expenditures are one thing, a successful petrol store also requires constant access to fuel.
How can I open a gas station?
According to Absa, there are three ways to open a fuel station in the country right now:
“A service station’s asking price might currently range from R1 million to R35 million. Furthermore, a service station’s typical working capital demand might range between R1.2 million and R1.5 million,” according to Absa.
If, however, you want to develop a service station from the ground up, your physical set-up costs could range anywhere from R10 million to R100 million with highway sites commanding the greatest capital spend.
“The cost of these investments is determined by standard commercial property appraisal criteria, such as the operation’s profitability and an assessment of the actual real estate, including its assets and location.”
What is the profit margin of a gas station?
There’s a reason why nearly all gas stations are also stores: profit margins on gasoline are roughly 2%, so they make the majority of their money on pricey sandwiches and drinks.
Independents, I believe, make much less since they lack the purchasing power and storage capacity of the big boys. I’m not sure how viable it is for some of the smaller businesses to buy ex Rotterdam when the wholesale price is low and sell to us when the price rises again; I’m not sure how sustainable that policy is.
For both petrol and diesel, fuel duty is now collected at a flat rate of 57.95p per litre, with VAT of 20% applied to both the product price and the levy. With petrol costing 1.20 a litre, the government receives approximately 82p from each litre.
In Uganda, how many petrol stations are there?
In the country, there are over 2,000 fuel pump stations, many of which do not fulfill the required criteria. Officials have also often expressed their dissatisfaction with the ministry’s and UNBS’s insufficient manpower to adequately cover the country in terms of fuel marking.
In Tanzania, how much does it cost to build a gas station?
The obvious truth is that demand for petroleum goods in rural regions is rapidly increasing. The growth in economic activity in certain places is one of the causes for this.
Take a look around. Throughout Tanzania’s rural districts. Kerosene is used by the villagers. Crops are transported in large trucks. Because there is still a power outage problem, individuals rely on generators, both diesel and gasoline-powered.
The growing mode of transportation is the most crucial. There are tricycles, or boda-bodas as they are affectionately known, and this has increased demand for petroleum products in rural regions. The good news is that all of these cars and generators run on diesel or gasoline, which you can sell at your filling station for a profit. Rural locations have fewer fueling stations, which is a startling fact. EWURA.
Even EWURA has made it easier for investors to put up stations in specific locations by lowering the requirements.
It is less expensive to begin. In rural locations, a tiny petrol station can be set up for less than TZS 58 million. However, if you can afford it, I would urge you to invest more.
You can easily raise the funds without begging, bribing, or cajoling friends who may or may not be willing to assist you. You can also start small like this and expand to include other stations in different cities across the country.
If you’ve read my articles or bought my feasibility report on how to start a lucrative petrol station company in Tanzania, you’ll know that it takes a lot of work.
In Tanzania, it costs between Tsh 200 million and Tsh 1 billion to open a petrol station, particularly in urban regions. Huge start-up costs are no longer an impediment to becoming a fuel station owner.
If you want to open a filling station but don’t have enough money to do it. I would suggest that you open a little petrol station in a rural area rather than a commercial city. Furthermore, because the EWURA wants to encourage investors to put up additional gasoline stations in remote locations, there are fewer government requirements for opening up a petrol station in rural areas.
EWURA, for example, can allow micro fuel stations in certain locations if they have a minimum land area of 400 square meters. You can begin with just two storage tanks. Depending on whatever fuel products are in high demand in your area, you can start with one diesel tank and one gasoline tank. The total capacity is 5,000 or 4,5000 liters.
A comprehensive business plan is the foundation of any modern firm. Successful oil and gas firm owners have adopted the business plan for strategic planning as well as to adapt to uncertainty across the industry as a result of rapid changes in the industry, such as regulatory changes and oil price volatility.
The unfortunate reality is that the majority of Tanzanians are unaware of the importance of a business plan. When they consider applying for a bank loan, they will require a business plan.
Technically speaking, developing your own business strategy will help you stand out in today’s competitive oil and gas industry. The petrol station company can be profitable, but it requires a great deal of strategic planning. When most Tanzanians first considered getting into the petrol station industry, they were more interested in the huge profit margin per liter than in the entire sales volume.
It is no secret that a profit margin of 100 to 300 cents per liter may be made in the petrol station business. However, just because a firm has a high profit margin does not indicate it will be beneficial for you.
Let’s say your profit margin is TZS 200 per liter, but you only sell 300 each day. You’ll make less money than someone with a daily total sales volume of roughly 6000 liters.
As a result, I highly advise investors to concentrate on total sales volume rather than profit per liter of fuel. A comprehensive business plan will also assist you in forecasting your sales estimates and determining the type of firm you are establishing.
You will require government approval to build and operate a petrol station anywhere in Tanzania. You may require a number of approvals. EWURA is the result of a collaboration between the National Economic Empowerment Council and the National Economic Empowerment Council.
Before you start the process of obtaining the appropriate permits and licenses, I would urge you to employ a consultant to examine whether your location is commercial for beginning a petrol station business.
The government entities that control the oil and gas industry’s downstream sub-sector or segment are known as EWURA. EWURA permission can be obtained in one of two ways:
After the NEMC’s environmental impact assessment, the building permit, and the land title have all been completed, you must obtain EWURA clearance to construct your station. You won’t be able to construct the gas station the way you want. The EWURA condition must be met. I recommend that you go to the EWURA office to find out more about their requirements.
After you’ve finished building the fuel station, EWURA must still approve it and give you permission to begin selling petroleum goods. Your TZS 1,000,000 license to operate a gas station was purchased.
How much does a petrol station make per month in South Africa?
The convenience store raises the station’s cost, but according to Engen, it earns R309,000 in average monthly turnover in this example. An Engen at the high end of the scale will set you back around R7 million.
How much profit do you make per litre of gasoline?
Petrol stations, according to sources, earn Rs3.91 per litre on petrol and Rs3.30 per litre on diesel. According to sources, petrol stations make a 2.75 percent profit per litre, which the Pakistan Petroleum Dealers Association (PPDA) has demanded be increased to 6%.
How much gasoline does a gas station have on hand?
Underground petrol storage tanks usually come in capacities ranging from 2,000 to 100,000 litres. Because of their underground location, these tanks are less vulnerable to fire, explosions, theft, and impact damage. As the name implies, underground petrol storage tanks take very little above ground space requiring pipes for venting and access points. For commercial forecourts, underground petrol tanks are frequently the best storage option.
For the vast majority of enterprises, however, above-ground storage tanks are preferable over subsurface tanks. Because subterranean petrol tanks necessitate extensive excavation, repairs are much more difficult and expensive, and leaks are more likely to go unreported, this is the case.