Five things You Need to Keep in Mind When You Rent or Buy Petrol Station in Tanzania

Are you hoping to run a thriving petrol station business?

At Tanzania Petroleum, we know the impact on the growth of people and society that you can bring when you make your idea of running a petrol station a reality.

While building a petrol station from scratch is rewarding. But it can be time-consuming and capital-intensive.

A typical petrol station with a storage capacity of 2 storage tanks (20,000 liters of petrol and 25,000 liters of diesel) may cost between 200,000US$ and 300,000US$, equivalent to Tzsh 450 million to Tzsh600 million. Depending on the location, this cost excludes land costs.

Also, acquiring permits and licenses from energy regulatory authorities, finding appropriate locations, and mobilizing consultants and contractors to complete your petrol station can take 18 months of hard work and dedication.

This is why building petrol stations from scratch is only for some.

The biggest challenge in renting or buying an existing petrol station is the accuracy of information supplied by the current owner of a petrol station. Or even an agent.

But here are important things to keep in mind when you buy or lease a petrol station in Tanzania:

1. Asses location. The key determinant to whether the future success or failure of the petrol station business is location.

The most common misconception we observe is that because your petrol site is on a busy road or populated area is appropriate for operating a profitable petrol station. The simple reality is that motorists and consumers can pay more to avoid turning into a petrol station, which makes entering or exiting difficult.

So before renting or buying a petrol station, you need to assess how easy it is for motorists and consumers to enter and leave the sites. How is the site accessible from the main road?

You must ensure that your site allows access via roadways and frontage. The location must have easy in and out access. Also, your site must be located at an optimum distance, enabling motorists driving at average speed to have enough time to make buying decisions, slow down their vehicle, and enter your station safely.

If there is a problem with access and visibility, determine what you can do to improve access to the site. In addition,
it is crucial to understand who your closest competitor is in your trading areas and identify their strength and weakness and what volume they are achieving.

If other petrol stations exist in the same trade area, Identify their strength, weakness, and what volume they are achieving. You may also need to identify the competitive advantage your new site could gain on its fuel volume.

.2. Asses the profitability of the business.
You are going into the petrol station business not only because you are passionate about this business but also because you want to make money. So, you should see if you would generate a good return on your investment.

3.Find the reasons for selling or renting the petrol station.
Only a few petrol station owners will tell you why they sell their stations. Your job is to find out why they are selling or renting. This will lead you in the right direction and guide you to success in your petrol-filling business. You should avoid renting or buying a petrol station if you discover the owner is selling because the business is not doing well, because of the sanction from relevant authorities for not complying with guidelines, or because of debt and bankruptcy.

4. Check the owner’s license.
Be sure that the petrol station you intend to buy has all the required license and permit from EWURA, NEMC, and other authorities to do what it does. With the increasing number of petrol stations running without approval from EWURA, check a station’s license before closing the deal. It will help you a lot.

5.Know the owners.
Determine exactly who the owners of the petrol stations are. Otherwise, you will purchase, and later you’ll discover that a station is owned by someone else.