Description

Petroleum products are among the most valuable natural resources abundantly available in our country. Nigerians and people everywhere use petroleum products as a fuel in their automobiles, generating sets, industrial plants and for cooking purposes, thus making petroleum products an essential commodity that is needed for the daily operations of individual, industrial and national activities.

Undoubtedly a vast investment potential exists in the domestic liquefied petroleum gas filling sub-sector of the Oil and Gas Industry in Nigeria. A large proportion of the middle and upper socio-economic class of people depend on gas for cooking purposes. So are industries, government establishments, hotels, hospitals, restaurants, bakeries e.t.c

A statistic for the country some years ago showed that a mere 5% of the consumption potentials of LPG were attained. It is therefore evident that we have a long way to saturate the Nigeria LPG Market if it were to be fully developed because if a domestic consumer is sure of getting LPG when and where he needs it at the right price, he would most willingly convert from firewood, coal or kerosene to LPG.

With huge gas reserves of 185 trillion cubic feet and the Nigerian government’s strong commitment to developing the gas industry through the Gas Master Plan, there are a lot of emerging opportunities for investors in the sub- sector.
With less than one kilogram me per capita consumption, Nigeria ranks among the lowest liquefied petroleum gas consuming states in Africa despite its huge gas resources.

Today, Nigeria consumes about 110, 000MT per annum and we have about 130 LPG plants and 7,000 retailing outlets. If we can move the consumption level up to 750,000MT per annum, we expect to have about 250 LPG plants and 74,970 retailing outlets.”

More succinctly, a captive market of over 165 million people makes investment in LPG bottling plant viable since one of the challenges the Federal Government as well as LPG operators are forced to grapple with is how to popularize the use of cooking gas in Nigeria.

Following the unprecedented demand for LPG in Nigeria and attendant scarcity of the product which has resulted in sharp and arbitrary price increases, the distribution of gas products has been deregulated. Consequently, private individuals and firms can now set up LPG plants.

This report seeks to examine the financial viability or otherwise of setting up a Liquefied Petroleum Gas {LPG} refilling and distribution business in Ikeja, Lagos state.

The business would supply about 70 cylinder of 12.5 kg weight per day through personalized cylinder pick-up and delivery services to our client’s doorstep with our vehicles.