Ten Biggest Opportunities for investor in the petroleum marketing industry in Tanzania and East Africa.

 

Are you worried about the risk of pouring your money, substantial time, and effort into project opportunities that have no likelihood of realizations?

Choosing the right project opportunity for investment can be difficult, expensive, and time-consuming—and if you make the wrong decisions, it can devastate your resources.

Here’s an article gives you fresh analysis on ten sustainable oil and gas project opportunities to aid your final decisions, so you can rest easy and focus on growing your business.

   

1.Start, operate and maintain a future sustainable Petrol Station

If you’re brainstorming in order to find a perfect business idea in Tanzania and the East African oil and gas sector, investing your cash in the petrol filling station business is a wise decision.

 This business ensures steady profit in a reasonable time from setting up. You might feel the market is already flooded, but you can come in and have a go at it. Petrol stations are in every street corner because they make insane profits.

Don’t get me wrong. I am not saying this to brag. Instead, I am telling you this because I’ve carried out solid research. So, I can confidently tell you that this is one of the right business opportunities to pursue.

The filling station market emerged in tandem with the automobile industry.

Due to the country’s projected number of vehicles and the emerging mode of transportation. There are tricycles or “boda-boda,” as everyone calls it, increasing the demand for petroleum products in Tanzania. The good news is that all these vehicles and generators run on diesel or petrol.

With petrol stations on every street corner, you might feel the market is already saturated. But with a good location, commercial expertise, systematic marketing with superior customer services , and a wide range of services, new entrepreneurs like you can win the competition in this business. It would wise to do solid research to see whether your location is commercially viable for petrol station investment before starting your project.

                                                        2.Become petroleum product/fuel road transporter

Due to the increasing demand for petroleum products in East African countries, transportation of these products (for example, premium motor spirit (PMS), diesel, kerosene, and other petroleum products) has opened a lucrative investment opportunity for entrepreneurs. This business is about using fuel tankers (trucks) to distribute petroleum products with transport charges depending on the distance to be covered and the truck’s capacity.

You will have to obtain a license from EWURA to be allowed to transport fuel across the country or to neighboring countries. You will have to purchase a truck and hire a qualified and experienced driver who will haul petroleum products for marketers from the depot to their desired destination.

I would recommend you start with transporting petroleum products from depots to filling stations locally across the country. As your business expands, you can acquire a new license to transit fuel to neighboring countries such as Uganda, Kenya, Rwanda, and Congo DRC.

3.Cooking Gas/LPG Reseller Shop

Liquefied petroleum gas (LPG) market (popularly known as cooking gas) is expected to grow by fifty percent in the near future due to the wide adoption of LPG as a source of energy for cooking in residential areas, replacing other traditional cooking fuel such as charcoal and firewood.

The first option to go into the LP Gas business is to set up a retail shop in highbrow areas. Location is a key driver to success in starting a cooking gas reseller shop. To start this LP gas business, you need at least 22 to 35 pieces of gas cylinders (preferably 15Kg and 6Kg gas cylinders), regulators and hose, and a weighing scale. You will buy the cooking gas from major dealers/super dealers and resell them to households in your target location.

 I often wonder how they make a profit seeing that there is intense competition in this business. But the best part is that, as the number of the household switching to this fuel increase, demand increase and more customers arise.

4.Lubrication Oil Retail Shop 

Selling engine oil, brake fluid, and hydraulic oil is a profitable and highly thriving business venture an entrepreneur interested in making money from the oil and gas business value chain should consider. Vehicle owners subject their vehicles to servicing at regular intervals creates a market for lubrication oil products. In recent times, there is an increase in the lubrication oil production sector as it is one business you can readily go into with the hope of making great profit. The various needs of lube oils in homes, organizations, factories and industries cannot be overemphasized because people who have a mechanical demand for oil have continued to increase over the years. So, to start in this trade, have an expert carry out good feasibility studies.

  

5.Setting your own lubricant blending/Manufacturing Plant

The demand for lubricant oil such as blended motor oil, brake fluids lubricating greases, and other oil-based additives is huge in Tanzania. That’s why the most prominent marketers like Total and Lake oil recently have set up their own lubricant manufacturing facility.

So set up your own Lubricant manufacturing company in Tanzania can be a profitable venture. However, there are several lubricant oil manufacturing companies in Tanzania. But with a good distribution network, quality products, good marketing strategies, and sufficient start-up, a new lubricant trading company can win a competition.

6.Oil Farm/Depot/ Oil Storage Services

Imported fuel, as stated above, is stored in tank farms. Most oil marketers don’t own tank farms and, as a result, always need to keep their petroleum products in other tank farms. With a sizeable operating capital, you can construct a tank farm for the sole purpose of leasing it out to oil marketers who bring in petroleum products

7.Start Bulk Petroleum Operation/ Petroleum Products marketing company

Well-known oil brands like Total, Puma Energy (previously Oil BP), etc., are all petroleum wholesalers (popularly known as oil marketing companies). These companies are all foreign.

Over the last few years, several great brands that are owned by Tanzanians started to emerge in the market. You already know local brand names like Lake Oil, Afro Oil, and many more success stories for many entrepreneurs in downstream petroleum marketing in Tanzania and Africa.

These companies engage in importing, storing, and trading petroleum products to commercial consumers and end-users through their retail petrol stations outlet. The large upfront investment is needed to get tanks, trucks, training, certification, and products if you pick to follow these routes.

Entrepreneurs in this segment sell petroleum products to transport companies, mines, farmers, colleges and schools, factories, and some unbranded or privately-owned petrol stations. Some independent wholesalers trade petroleum products to land-locked countries such as Burundi, DRC Congo, Rwanda, and Uganda.

This is a capital-intensive project. But you can reach out to investors with a proper business plan for raising capital. 

 

8.Start Small Scale LP-Refilling Plant Center

Liquefied Petroleum Gas(LPG) plant is a facility that can either automatically or manually refill LPG cylinders. There are no enough LPG refilling plants to match the growing demand for LP Gas in Tanzania. Also, most LPG plants are located in Dar es salaam.

By establishing your small-scale LPG refilling plant in major cities with a capacity of 20 metric tonnes, you will help customers avoid those extra trips by delivering LPG right doorstep or just by walking a short distance to your service center. It saves not only time but also costs and hassles. You can supply the LP Gas to households and also secure supply contracts to commercial customers like schools, hotels, hospitals, malls, construction sites.

 

9.LPG retailing business

 As an LPgas refilling center, you will purchase bulk LP Gas from a large oil marketing company in Tanzania and sell to households and small businesses in your trading areas.