If You Expand Your Business By Starting a Petrol Station in Tanzania, How Much More Money Could You Make?

Have you ever considered increasing your revenue by expanding into the petrol station business?

In recent years, the petrol station industry in Tanzania has been dominated by three major multinational companies.

However, the latest market study by Kalibrate has shown that the market is starting to shift. A number of strong, smaller investors and local entrepreneurs have plans for aggressive investment and rapid expansion across the country in the coming years.

The new Kalibrate market study has revealed that Tanzania is the land of opportunity for the petrol station business.

So, if you are a successful business owner looking to add new streams of revenue by starting a petrol station business, then this article is for you.

How Much More Could You Make from the Petrol Station Industry in Tanzania?

The success or failure of a petrol station depends on its location, accounting for 80% of the outcome. Choosing the right location can lead to faster sales, while a poor location can result in years of slow growth.

For example, our client who runs a petrol station in Mwanza sells 80,000 liters per month. So, 80,000 liters x 108 Tsh per liter = Tsh 8,640,000 per month. This is the total income he makes from his petrol station per month.

Similarly, our client in Arusha sells 200,000 liters of fuel per month. So, 200,000 x 108 Tsh/liter = Tsh 21,600,000 per month. Their total revenue from their petrol station is Tsh 21,600,000 per month.

The volume of sales depends on your ability to choose the right location. Therefore, conducting an in-depth feasibility study before building a petrol station is crucial to choose a location with high profit potential.

Requirements for Petrol Station Business in Tanzania

Now that you know the profit potential for petrol stations in Tanzania, the next step is to identify what it takes to build your successful petrol station.

Building a petrol station involves a multitude of costs, ranging from visible ones like office buildings, fuel pumps, storage tanks, concrete paving, and canopies, to hidden costs such as piping and signage installation.

Other hidden costs include preparing sites for storage tank installation, including excavation work, along with foundations for fencing. Components such as control panels, cabling, and lighting also add to the expenses.

Depending on the location of your petrol station, leveling terrain may be necessary to create a stable foundation and ensure proper drainage. Conducting in-depth research is crucial to avoid underestimating investment and to have proper budgeting.

Licenses and Permits

Understanding regulatory requirements for running a petrol station is essential, as mistakes in this area can delay the building process.

There are numerous permits and licenses required to run a successful petrol station business in Tanzania.

These include an Environmental Impact Assessment certificate from NEMC, a construction permit from EWURA, and an operational license from EWURA. Additionally, there are health and safety licenses from OSHA, as well as fire certificates and land title deeds from the Ministry of Land.

We hope this guide will aid you in expanding into the growing petrol station business. We recommend conducting proper research and planning before venturing into the project to increase your chances of success.