Five Ways to Leverage Petrol Station Opportunities In Tanzania For Growth and Success.
In recent years, the petrol station industry in Tanzania has been largely controlled by three multinational energy companies.
However, there’s a shift happening now, with smaller investors and entrepreneurs gearing up for aggressive expansion by building new petrol stations. With the growing number of roads and economic activities like transportation, the demand for fuel is soaring and expected to keep rising.
If you’re eyeing opportunities in the fuel sector, here are five straightforward strategies to capitalize on petrol station business opportunities in Tanzania:
- Acquiring an Existing Petrol Station:
Buying an existing petrol station is a smarter option than starting from scratch. You can purchase stations either from independent retailers or oil marketing companies, but it requires a substantial investment.
To acquire a station, you need to apply for a license change at the Energy and Water Utilities Authority (EWURA) by submitting the sale agreement and obtaining approval from the current owner.
- Leasing a Petrol Station:
Leasing an existing petrol station is the easiest way to enter the business, especially with limited funds and no prior experience. It provides an opportunity to learn and gain experience without committing to full ownership. The cost of leasing or buying a station varies based on location and turnover.
- Becoming a Dealer for an Oil Marketing Company:
Operating a petrol station under an oil marketing company’s brand offers several advantages, including established credibility and minimal marketing efforts.
However, it comes with a smaller profit margin per liter and contractual obligations to source fuel exclusively from the company. Initial investment requirements range from Tsh 150 million to Tsh 300 million.
- 4. Constructing a Petrol Station from Scratch in a Prime Location:
Building a station from the ground up is the most challenging but potentially rewarding option. It requires thorough research, planning, and obtaining necessary licenses and environmental authorizations. However, it allows complete control over pricing and brand development. Securing a prime location with high vehicular traffic ensures sustainable profits.
- Starting a Small-Scale Fuel Station in Rural Areas:
Establishing a mini fuel station in rural areas is a cost-effective approach that promises sustainable profits. With an investment of around TZS 60-70 million, you can set up a small station, catering to the growing demand driven by emerging transportation modes like tricycles and boda-bodas.
By leveraging these strategies, entrepreneurs can tap into the lucrative opportunities offered by the petrol station business in Tanzania and pave the way for growth and success.
