LP Gas (cooking) gas is lucrative and competitive business in Tanzania. The good news is that entrepreneur with quality products, a good marketing plan and sufficient start-up capital can win competition in this business.

This already-written  LP Gas business plan in Tanzania help not only  translate your ideas into business and your dream into reality. It may also used for bank loans, to write business concept note and as a road map for running your business and should also be used as ongoing tools to manage your business and win competition in this  business.

EXECUTIVE SUMMARY

Overview

There has been a substantial raise in the consumption of liquefied petroleum gas (LPG) in the last ten years. The annual LPG consumption in Tanzania has grown from 5,500 metric tonnes in 2005 to 145,800 metric tonnes in 2019. Furthermore, with continued economic development in Tanzania as well as increasing awareness in the use of LPG as the best alternative to firewood and charcoal, the consumption of LPG will grow to a significantly high level in both urban and rural areas. And with the Tanzanian government’s ambition to scale up the use of LPG across the nation, it will lead to increase in LP Gas demand and supply to hotels, homes, factories, boarding schools, army camps, mines as well as petrol stations.

Although competition in the LP Cooking gas business has increased over the past few years in Tanzania, with our effective marketing and supply strategies, building close client relationship as well as providing complementary services, the newly-established LP Gas retailer like Quick Gas can still be profitable and assured of recovering its entire investment.

The Company

Quick Gas Limited will be a newly-established LPG (Liquefied Petroleum Gas) distributer/retailer in the Kasulu District of the Kigoma Region in Tanzania to cater to the booming LP Gas (cooking gas) demand.

Quick Gas Limited will be duly registered and will obtain a trade license to operate as a Liquefied Petroleum Gas (LPG; popularly known as cooking gas) distributor/retailer in Tanzania. Quick Gas Limited will be equipped with a strong team with both technical and business background in managing all aspects of an LP Gas business: organizing, financing, marketing, promoting products and services, and solving technical and organizational problems.

Products and Services:

Our products and services include:

  • LP Gas (cooking gas) in 6kg, 15kg, 30kg and many other volumes.
  • LPG cylinders of various sizes, colour and design.
  • Cookers and fittings such as pipes, gauges etc.
  • Site installation services.
  • Home delivery of products and services.

Customers/clients:

Quick Gas will deliver LP Gas to household, industrial and commercial customers in Kasulu District in the Kigoma Region and will expand to other location of the city after three years of services.

Competition

Quick Gas Limited will have both direct and indirect competitors but our competitive advantage is that majority of the population will opt for LP Gas rather than buy firewood or charcoal, and there are more customers to go round.

Financial Considerations

The financial projection of this business plan is attached as an spreadsheet file.

Objectives

The underlying objectives of QUICK GAS limited is stated as follows:

  • To be known as a top quality, safe and reliable LP Gas delivery service provider in Tanzania.
  • To achieve and preserve a high gross profit margin.
  • To expand to other location within the city after three years of service in the Kasulu district of Kigoma Region.
  • To achieve 25% of the market share within the first three years.
Form of Business: Limited Liability Company
State of Business: Start-up (new business)
Managing Director: Lawrence Mambo
Business Development Consultant: Hussein A. Boffu
Opening Hours: Mondays to Saturdays: 7 AM – 7 PM.

Sundays: 12 PM – 6 PM

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In the full version, you will have access to the following table of contents:

EXECUTIVE SUMMARY

  • Overview
  • The Company
  • Products and Services
  • Customers/clients

BUSINESS DESCRIPTION

  • Mission
  • Vision
  • Objectives
  • Our Values
  • Keys to Success

PRODUCTS AND SERVICES

MANAGEMENT TEAM

MARKET ANALYSIS AND TRENDS

  • Market Research
  • LP Gas Import in Tanzania
  • LP Gas Industry Trends
  • LP Gas Industry Outlook
  • Our Target Market

COMPETITOR ANALYSIS

  • Direct Competition
  • Indirect Competition
  • Competitive Advantage

SALES AND MARKETING PLAN

OPERATIONAL PLAN

  • Opening Days/Hours
  • Location
  • Setup Cost
  • Machinery/Equipment Requirement

SWOT Analysis

PEST Analysis

FINANCIAL PLAN AND PROJECTION

 

For the complete business plan for starting and running a LP Cooking gas business  in Tanzania, make a payment of $150 (or its equivalent in Tanzanian Shillings TZS 300,000) through Tgo pesa, M-pesa to this number: +255655376543.

Once your payment is done, send an SMS to +255768183677 or +255655376543 with the following details:

  • Your full name.
  • Your email address.

Alternatively, send an email with the above details to info@tanzaniapetroleum.com. The moment we receive your email or SMS and we confirm your payment, the eBook will be delivered to your email address (in PDF) within fifteen minutes.

You can then download it and read it on your smartphone or computer.

If you’re not in Tanzania, send an email to info@tanzaniapetroleum.com and we will devise a payment option for you.

The current market of petroleum products in Tanzania is $1.77 billion, growing at the annual rate of 15 percent.

With continued economic activities in Tanzania, this growth rate is likely to accelerate in the near term.

Although there has been series of natural gas discoveries in the past 10 years and small gas production in Tanzania, the demand for energy is growing fast and this demand can’t be covered by liquefied natural gas (LNG), new natural gas field development or alternative energy initiatives.

The best way to meet Tanzania’s huge energy demand is the combination of these sources of energy, including petroleum products.

So, no matter how much is imported, more is needed to meet the ever-growing energy need in the country.

The wholesale petroleum products business is so lucrative that aspiring entrepreneurs who are passionate about benefiting from petroleum product wholesaling can jump in to sell to an already available market.

The best part of selling petroleum products in Tanzania is that you are not cajoling people to buy products they don’t intend to buy like multi-level marketers do.

You are serving people who can’t do without your products.

What is Petroleum Products Wholesaling and How does it Work?

Now that you know that there is a huge and profitable market for petroleum products in Tanzania with endless potential growth, let us have a look at what petroleum products wholesaling business is and how it works in Tanzania.

The wholesale petroleum business is nothing new in Tanzania.

Well-know 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 brand names like Lake Oil , Afro Oil, and many more.

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

However, there is an exiting and profitable market for independent petroleum wholesalers who operate without their own specific retail brand name.

These wholesalers sell petroleum products to transport companies, mines, farmers, colleges and schools, factories and to 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.

The best part of this is that Tanzanians can now actively participate and reap rewards from petroleum products wholesaling. As an independent petroleum wholesaler, your task is to go out and look for customers. Once you get an order, you will relay the order to suppliers and arrange delivery from the supplier’s depot to customers.

I would strongly recommend you target large customers who have the financial muscle to pay you in advance before the delivery.

Also, you have to negotiate with suppliers.

Profit Analysis (How much does independent petroleum wholesaler make in Tanzania?)

There is no limit to the amount of money that you can make in the wholesale petroleum business. It depends on your efforts, commitment and your marketing skills or creativity.

Since the wholesale petroleum products price is regulated and like any other commodity, petroleum products price tend to fluctuate regularly due to exchange rates, international benchmarking or fluctuating oil price in the global market.

Therefore, this tends to affect the profit margin in this business.

But a realistic profit margin that independent petroleum wholesalers make is TZS 60 to 67 per liter.

That means for only for only 100,000 liter per month, a petroleum wholesaler will be able to earn around TZS 60 x 100,000 liters = TZS 6, 000,0000.

Keep in mind that the transportation cost (distribution cost) are added in the price.

How to Become a Petroleum Products Wholesaler in Tanzania

Business Plan:

The wholesaler petroleum products business needs strategic planning to start.

To be completely transparent with you, most Tanzanians do not understand the value of a business plan. They only request for business plan when they want bank loan or they engage in business competition.

While it is vital to prepare a business plan before you start business in market, the emphasis of business plan is essentially as a plan to enter the oil and gas industry.

As an independent petroleum wholesaler, you will compete with wholesale petroleum companies that have huge financial capacity and highly specialized and technical staff.

Your wholesale petroleum business plan will act as a roadmap to reach your business objectives and give you a clear picture on how to compete well in the market.

Register your company:

Get your limited liability company registered with the Business Registration and Licensing Agency (BRELA).

Get EWURA Approval:

The Energy Water and Utilities Regulatory Authority (EWURA) is the government agency that regulates the downstream petroleum product sub-sector in Tanzania. You have to get a wholesale petroleum license that allows you to sell petroleum products to bulk customers.

Keys to Success

Merging:

To ensure a good profit margin, pick a supplier who will offer you high-quality products at competitive rates

Marketing Skills:

As I mentioned earlier, you compete with petroleum wholesalers who have huge financial muscles and talented technical team.

So, employing the best marketing strategies will help you to compete well in this industry.

This sample oil and gas exploration and production business plan can be used for grant applications, bank loans, proposal writing, business concept notes and as a roadmap to achieve your business objectives.

Also, you crucially need the guidance of a specialist petroleum industry consultant in Tanzania, such as Hussein Boffu, to help you in implementing this business plan.

Executive Summary

In recent years, due to economic recovery, Tanzania has registered significant growth in the demand for gas. Moreover, increased gas-to-power initiatives, increased industrialization and continued economic activities in the region require growth in gas-delivered volume for supporting economic expansion. Glass supply is so inadequate that current small gas-producing fields can’t cover the growth demand for all power consumers and industrial users. Moreover, the approach used to meet the increased gas demand elsewhere in the world is to encourage and attracting exploration and production companies through bidding around.

Rich Energy Exploration and Production Tanzania Limited is positioned to capitalize on these growing opportunities, that the Tanzanian oil and gas market hold, by playing vital roles in developing a new source of gas supply to ensure the availability of enough gas for power generation, industrial and households use.

The founding team has over 60 years’ experience in aspects of the energy industry including engineering, managerial, researching and marketing. The company will be established on 29th October 2020 to explore, develop and produce natural gas for industrial users and power stations in Tanzania.

Rich Energy Exploration and Production Tanzania Limited expects that approximately 40.4 billion in gas sales will be created annually.

Our vision

To facilitate industrial and commercial development, job creation, and economic growth through development of indigenous natural gas sector.

The mission

Our mission is to be the top performer in our industry in order to enhance the value of our shareholders. We will utilize the team work of our people and appropriate technology to provide our customers with high-quality products competitive in price.

Objectives

  • To provide competitive total shareholders’ return in top 25 percent in the industry.
  • Maintain our financial flexibility and consistently fund our capital program.
  • Achieve and maintain the highest standards of safety, ethics, total quality and environmental performance in all operations.
  • Improve competitive performance through a more effective utilization of technology.
  • Build employee commitment and loyalty through communication and creation of opportunities.
  • Satisfy customer requirement through continuous quality improvement.
  • Operate our business in efficient, low cost, high quality manner, maintaining high standards of ethics, safety and environment compliance.

Key to Success

  • Add commercial reserves by drilling at low cost reserves relative to competition.
  • Produce oil and gas resources at high margin relative to the competition.
  • Add commercial reserves by acquiring assets at low cost relative to the competition.

The Management

Chief Executive Officer: Adam Smith has over 30 years’ experience with specialized technical, operational and managerial abilities focused on critical aspect of the energy sector industry including engineering, operating, research and marketing abilities having worked at the managing director level with Shell, Equinor etc.

Financial Engineer: Chriss Mkema Innocent is a financial engineer with deep operating experience, great negotiation skills and a knack for numbers and deal-making.

Operation Manager: Abdallah Igengu is a reservoir and petroleum engineer with 32 years’ experience in the upstream oil and gas industry in different countries. He has a Bachelor of Science in Petroleum Engineering and an MBA from Madonna University, USA.

Legal Advisor: Anganile Anyeliswe.

Petroleum Consultant: Hussein Boffu

Board of Directors: Rich Energy Exploration and Production Tanzania Limited is controlled through its Board of Directors. The board will consist four members and comprises non-executive directors. The Board’s main roles are to create value for shareholders, to provide entrepreneurial leadership to the Group, to approve the Group’s strategic objectives and to ensure that the necessary financial and other resources are made available to enable the Group to meet its objectives.

Products and Services

Rich Energy Exploration and Production Tanzania Limited will be selling natural gas to industrial customers such as factories, hotels and power generation customers such power stations and government agencies including state-owned utility company, TANESCO, and state-owned national oil company, Tanzania Petroleum Development Corporation (TPDC).

Market Analysis

Tanzania is arguably the most exciting oil exploration region in the world. But it still is the most untapped region. As at the time of this writing, exploration activities confirmed reserves of 57.54 trillion cubic feet of natural gas in Tanzania, and more than 441 trillion cubic feet of natural gas are still trapped underground, solely in the coastal region, according to the US Geological Survey. So, discoveries might be forthcoming. This is why giants like Royal Dutch Shell, Equinor, Total and Pavilion Energy are buzzing around Tanzania like bees do to honey. The big boys won’t lift a finger if there’s no chance big profits could be made. Furthermore, with continued economic growth in Tanzania will come an increased gas demand. These signs indicate that the future for the oil and gas exploration activity is really bright.

Trends

There has been a change in the dynamic of oil and gas exploration and development in Tanzania, driven by the 2014-2016 oil price slump which reflects the global oil and gas industry downturn. The region has also seen takeovers and mergers amongst operating companies. Most noticeable of these were that Royal Dutch Shell acquired BG Group for US $50 million (the takeover gave Shell 60% of BG’s block 1 and block 4 offshore Tanzania in February 2016) and the Indonesian company, Medco Energi’s $539m acquisition of Ophir Energy in May 2019.

Competition

There have been significant onshore and offshore discoveries of gas in the last ten years and it is expected that the development of these discoveries will increase competition in the future.

Pan African Energy Tanzania (PAET), a subsidiary of Orca Exploration Group Inc. (“Orca”), operator of the Songo Songo gas field located in the southern part of Tanzania, has been producing gas in Tanzania since 2004.

Mnazi Bay field started producing gas in 2015 operated by Pertamina-owned Maurel & Prom partnered with Alberta-based Wentworth Resources and the state-owned oil company Tanzania Petroleum Development Corporation have a stake in the field.

For the complete business plan for establishing oil and gas exploration and production companies in Tanzania, contact us via +255655376543 or send us an email via info@tanzaniapetroleum.com


When I was a kid, I was told that the source of energy was firewood. We used it to cook and do everything.
By the time we got used to firewood, the government announced that gas was now _the_ clean source of cooking energy.
It was a bit tough for many Tanzanians to embrace this new source of cooking energy.

Quite a number of people in Tanzania feared that LPG was highly explosive and could endanger their home. Also, it was seen as a luxury reserved for the rich.


The awareness of the social benefits of using LPG was low among the beneficiaries. So, the annual consumption of LP gas in Tanzania was only 5,500MT in 2005.


Entering into the LPG business in Tanzania at those times was unprofitable because the market demand for cooking with LP gas was too small and Tanzanians were unwilling to pay for it.


With regular awareness campaigns now, there has been a steady increase in the number of households using LPG. Today, most people in Tanzania are aware of the LPG as a clean and healthy source of domestic cooking energy, and they are moving away from charcoal and firewood.


The annual LP gas consumption in Tanzania has grown from 5,500 metric tonnes in 2005 to 145,800 metric tonnes in 2019.


With this steady upward movement of LPG consumption in Tanzania, investing in the LPG business can be one of the best business ideas to pursue in Tanzania right now. Why? Because the LPG has become a constant domestic requirement for households (families), lodges, restaurants, schools, colleges, hotels and industries.

Five LPG Business Opportunities in Tanzania

There are several opportunities across the LP cooking gas downstream industry in Tanzania.


1. LPG Bulk Terminal Storage: This is a lucrative investment opportunity in Tanzania’s LPG value chain. This kind of investment has a multiple source of income. As a large LP Gas marketer, you import, store and sell LP Gas to super dealers, gas refilling station owners, and you can also sell in bulk to commercial customers like hotel, lodges, schools and colleges. Furthermore, you can earn additional income by offering installation service of bulk tanks and pipeline networks to schools and hotels who need to use LP Gas for cooking.
The initial capital requirement for this storage terminal is huge: it will require not less than TZS 1.5 billion. However, the business is more profitable as you’d sell the LPG in bulk.


2. LPG Re-filling Plant/Center: I’d recommend this to anyone with financial muscle. As a refilling center, you will purchase bulk LP Gas and sell to distributors and consumers. It’s capital intensive and the total project cost for setting up a refilling center in Tanzania is TZS 250 million to TZS 300 million.

3. Establishment of Gas Cylinder Manufacturing Plant: It will interest you to know that Tanzania imports the LP Gas cylinders from India. So, there is no functional LP Gas cylinder manufacturing facility in Tanzania, and this presents immense opportunities for aspiring entrepreneurs with sizable amount of capital to set up a gas cylinder manufacturing plants in Tanzania.


4. Start a Profitable LP Cooking Gas Retail Shop: The LP Gas retail shop is popularly known as LP Gas dealer or LP Gas reseller. As you walk along in the streets of Tanzania, you will notice that there are retail shops at every corner. It is cheap to start this business. You need TZS 2 million to TZS 6 million to start an LP Gas retail shop in Tanzania. The key factors to success in this business are location and your marketing skills. A prime location is a key determinant to the success of an LPG retail shop. Excellent customer services, word-of-mouth marketing and free delivery are crucial to success in this business.


5. LP Gas Distribution and Logistics: Opportunities in the segment is to involve in distributing of the LPG and its cylinders through tank trucks to different LPG gas dealers and LPG refilling centers in Tanzania.


What Next?


To get involved in this business, you have to get the finance needed, pick a strategic location and get an approval from EWURA. The LP Gas business is lucrative in Tanzania and it needs a lot of strategic planning to start.
_Tanzania Petroleum_ can help with that. We offer strategic planning,, business plan preparation services tailored specifically to the success of your oil and gas business. *Click here to learn more.*

  

Although the petrol station business is one of the lucrative business opportunities in Tanzania. The high initial capital requirement has been a huge stumbling block holding back many small investors to tap into this profitable business opportunities.

Many small investors have given up on their idea to go into the petrol station when they heard that it require TZS 200 million to 1 billion for petrol station set up in Tanzania.

Don’t bother if you currently can’t afford the capital requirement.

EWURA (The Energy Water and Utilities Regulatory Authority), the government agency responsible for regulating downstream petroleum sub-sector of the oil and gas industry (including approving and issuing the license for petrol stations, liquefied petroleum gas LPG business in Tanzania), has released a guideline to help you tap into this business even as a small investor.

The simple truth is that the demand for petroleum products is growing at a fast rate in rural areas. The part of these reasons is the increase in economic activities in those areas.

Read also: Petrol station business plan in Tanzania

Look all around. All over the rural areas in Tanzania. Villagers rely on kerosene. Big trucks transport crops. There is still a power-failure problem, so, people depend on generators—both diesel and petrol powered.

Most importantly is the emerging mode of transportation. There are tricycles or boda-boda, as everyone calls it, and it has increased the demand for petroleum products in rural areas. The good news is that all these vehicles and generators run on diesel or petrol that you can set up in your fuel station and get huge income selling it. The surprising truth is that there are fewer filling stations in rural areas. EWURA.

Even EWURA has set up less requirement to encourage investors on set up stations in those areas.

It’s cheaper to start. To set up a mini fuel station in rural areas can cost you less than TZS 58 million. But I would advise you to invest more if you can afford more.

And you can easily raise the capital without begging, bribing, or cajoling friends who might not willing to help you. Also, you can start small like this and grow bigger and develop more stations in other cities of the country.

If you have read my articles on purchased my feasibility report on how to set up profitable petrol station business in Tanzania, you will discover it require 

Tsh 200 million to 1 billion to set up a petrol station in Tanzania especially in town areas. Now huge start-up costs are not barrier to become a petrol station business owner.

If you’re passionate about starting a filling station and have limited funds. I would advise you it’s pretty cheaper to set up a mini fuel station in rural rather than in a commercial city. Moreover there less government requirement for setting up a petrol station in rural areas as the EWURA want to encourage investors to set more fuel stations in remote locations 

For example, as only a minimum size of 400 square meters of land space, EWURA can approve for mini fuel stations set up in those areas. And you can start with two storage tanks. Depending on which fuel products have high demand in your location but you can start with one tank for diesel and one tank for petrol. All of 5,000 or 4,5000 liters capacity.

How to Get Started With Profitable Mini Fuel Station In Tanzania

1.Business Plan and Feasibility Report.

Modern business start with a comprehensive business plan. To respond with rapid changes in the industry like regulatory changes and oil price volatility, successful oil and gas business owners have embraced the business plan for strategic planning as well as to respond with uncertainty across the industry.

The sad reality is that most Tanzanians don’t understand the value of the business plan. Their needs for the business plan come when they consider requesting a bank loan. 

Technically speaking, in today’s competitive oil and gas business, develop your own business plan will help you stand out from the crowd. Petrol station business can be lucrative that needs a lot of strategic planning. Most Tanzanians when they first consider joining the petrol station business were motivated by high-profit margin per liter rather than the total sales volumes that the petrol station business generates.

It is not a secret that the petrol station business can make a profit margin of 100 to 300 per liter. But since the business generates a solid profit margin does not mean it would be profitable for you.

Let’s say your margin is TZS 200 a liter and you sell only 300 a liter per day. That will make you less money than some someone who has total sales volume around 6000 liters a day.

Hence why I strongly recommend investors to focus on total sales volume versus a profit per liter of fuel. And a comprehensive business plan can help you forecast your sales projections and help you see what kind of business you are building. 

2.Getting the Needed Government approval.

To construct and operate a petrol station anywhere in Tanzania, you will need government approval. There are several approvals you may need. From the National economic empowerment council to EWURA.

I would advise you to hire a consultant to assess if your location is commercial for starting petrol station business before you start the process of acquiring necessary permit and license

3.Getting EWURA Approval

EWURA is the government agencies regulate the oil and gas business in the downstream sub-sector or segment of the petroleum industry. EWURA approval comes in two ways:

  1. Approval to construct.

After all environmental impact assessment carried out by NEMC, the building permit, and the land title dead you need to get approval from the EWURA to construct your station. You can’t build the petrol station the way you want. You have to meet the EWURA requirement. I will advise you to visit the EWURA office to learn more about their requirement.

2.License to Operate

After you have built the petrol station, you still need EWURA to approve it and give permission to start selling petroleum products. The license to operate your petrol station cost TZS 1,000,000.

I hope this helps.

Tanzania has been faster to develop in terms of LP Gas Growth. With favorable government initiatives, investors can get solid returns on this investment through the rapid growth of LP Gas consumption in the country.

You can find opportunities for LP Gas in households (families) hotels, schools, restaurants, clubs, mission and lodges, and commercials clients.

The market for liquefied petroleum gas(LPG) is growing at 25 percent. The LP Gas business has attracted over 6000 dealers and companies in Tanzania. And cooking gas retail shops are in every street corner.


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

Read also: A complete Small Investor’s Guide on How to Set Up Mini Fuel Station With Two Pumps Anywhere in Tanzania’s Rural Areas With Only TZS 55 Million

Outlook

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

Furthermore, favorable government initiatives in Tanzania to promote liquefied petroleum gas(LPG) as a clean source of energy for cooking with special focus to discourage deforestation and reduce the use of firewood and charcoal is expected to increase the demand for liquefied petroleum gas in Tanzania.

Three Ways to Get Started With Liquefied Petroleum Gas (LPG) Business In Tanzania.

The following are three ways to get started with the liquefied petroleum gas business are:

1. Small Scale: 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 small scale LPG business. To start small scale LP gas business you need 35 pieces of gas cylinders(Preferably 15Kg and 6Kg gas cylinder), regulators and hose, and weighing scale.

2.Medium-scale LPG Business: This is also known as a super dealer. Your job is to acquiring cylinders from LPG marketers and transporting them to last-mile dealers. Super-dealers vary widely in size, with the largest managing tens of thousands of cylinders at one time, while others only own a few hundred.


3.Large Scale LPG Business: It involves the installation of a liquefied Petroleum Gas plant. LPG filling plant is a lucrative investment opportunity that needs a lot of strategic planning and high initial capital requirement. The good news is that banks are aware of the potential of this business that is willing to give out the loans. So with a proper business plan, you can get a loan to start this business.

If you’re brainstorming in order to find a perfect business idea in Tanzania, 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 at it.

Petrol stations are in every street corner because they make insane profit

Don’t get me wrong. I am not saying this to brag. Instead, I am telling you this because I have carried out solid research.

So, I can confidently tell you that this is one of the right business opportunities to pursue.

Tanzania is expected to consume around 112,400 barrels per day (b/d) of refined fuel by 2025. This means that no matter how much petroleum
products are imported, still, extra will be needed to support the day-to-day economic activities in the country.

It  seems that there is high  entry barriers as the new entrants will have to invest  heavily in the initials capital requirements.

 But with proper, Petrol station business plan, you can get a loan from  bank  to start this business  and you will be able to pay back the money and the interest in about 8 months. 

Banks and investors are aware of the potential of petrol station business in emerging country like Tanzania and hence are willing to give out loans.

Now let’s see the profit margin of a petrol station business. It is very hard to determine how much you can make from the petrol station, because it depends on the following factors:

Location: The location of a station is incredibly important to ensure the success of this businesses.A petrol station located in a high traffic area earns more income than if located in a low traffic region.

Oil prices: Location is crucial for Profit margin tends to increase when oil price moves lower. Of course, the opposite can be true.

Number of employees: The number of employees affect profit margin, too. And it differs from one petrol station to the other.

Supplier: It depends on the supplier whom you source fuel from. Some suppliers leave a room for negotiating competitive prices.

Products and services you offer: A petrol station that depends on income solely from fuel will earn little money than the one offering a variety of goods, such as fast foods, etc.

But an average petrol station’s sales is about 5,000 to 25,000 liters per day, based on the factor above, but the profit margin made by petrol station is TZS 100 to  TZS 310 a liter.

So, if you sell 5000 liters a day will make you TZS 100 × 5000 = TZS 500,000. In a month, you will have a profit margin of TZS 30 × 500,000 = TZS 15,000,000. That figure can vary widely, depending on where petrol station is located. For example, the petrol stations that are placed in high traffic areas have an average fuel sales of more than 25,000 liters a day. So for that rates, the profit margin per day will be TZS 100 × 25,000 = TZS 2,500,000 Again, in a month, that will make you 30 × TZS 2,500,000 = TZS 75,000,000. So, this is why petrol stations are on every street corner, because they make good money. So, everyone wants to jump into this business.

I hope this helps.

Are you thinking of starting  and running a petrol station business in Tanzania?

Petrol station business in Tanzania is lucrative and highly competitive one. But with good strategic location, good marketing plan and sufficient start up capital, entrepreneurs can compete in this profitable business.

This already-written  petrol station business plan in Tanzania help not only  translate your ideas into business and your dream into reality. It may also used for bank loans and as a road map for running your business and should also be used as ongoing tools to manage your business and win competition in this industry.

You will also need a step by step support of a specialist  petroleum industry consultant like Hussein BOFFU to help you start your busines and implement the business plan.

Executive Summary

The purpose of this business plan is to raise  TZS 225 million for the development of a petrol station while showcasing the expected financial projection and operations over the next three years. PETRO OIL STATION is a fully registered gas station that is located in Kurasini, Dar es Salaam. Our chains of petrol stations that will be scattered all around major cities in Tanzania will adopt full service, minimum service and self-service as it suits the location. Our basic services and products offering to our highly esteemed customers as a standard gas station are: retailing of gasoline (petrol), diesel and lubricants for motor vehicles. We will make sure that we give our consumers nothing short of the very best. We will also run a convenience store, car wash, vulcanizing services, wheel balancing services, wheel alignment services and other related automobile repair services. We are committed, honest and quality focused.

At Petro Oil Station, we are passionate in the pursuit of excellence and financial success with uncompromising services and integrity. We are in the industry to make a positive mark. We are quite optimistic that our values and quality of products and service offering will help us drive our petrol station business to enviable heights and also help us attract the numbers of clients that will make the business highly profitable. We are a company that will be dedicated to establishing and maintaining the best practices as it relates to the petrol station industry.

The Company

Petro Oil Station, located in Kurasini of Dar es Salaam, is made up of a team of highly-trained, knowledgeable petrol station attendants who are ready to give you first-class treatment and an excellent customer service. This is irrespective of whether you come in with your car or just walk in to fill in your jerry can. We are opened from 6am to 11pm every weekdays including Saturdays and Sunday.

Business Description

Petro Oil Station is a completely computerized oil and gas service delivery centre with professionally trained and customer-sensitive pump attendants consistently offering varieties of petroleum products to automobile owners and operators in Dar es Salaam and its environs. We are consistently committed to ensuring we provide a memorable experience to all our customers who approach our pumps from time to time. A CRM software will be installed that will enable us to manage a one-to-one relationship with our customers no matter how large the numbers of our customer base may grow to. We will ensure that we get our customers involved when making some business decisions that will directly or indirectly affect them.

Products and Services

Petro Oil Station was established with the aim of maximizing profits in the petrol station industry. We want to compete favorably with the leading oil and gas retailing firms in Tanzania which is why we have put in place a competent quality assurance team that will ensure that every sale, service and maintenance carried out or related services rendered meet and even surpass our customers’ expectations.

We will work hard to ensure that Petro Oil Station Limited is not just accepted in Kurasini, but also in the entire capital city. We will also target other cities in Tanzania where we intend opening our branches. Our products and services are listed below.

Petro Oil Station products include:

  • Petrol (Petroleum Motor Spirit; PMS)
  • Diesel
  • Automotive Gas Oil (AGO)
  • Kerosene (Dual Purpose Kerosene; DPK)
  • Cooking Gas (Liquefied Petroleum Gas; LPG)
  • Lubricant Oil, Steering oil, Break fluids, etc.

Our services include:

  • Automotive services (e.g. car washes and general parts sales).
  • Providing automotive repair services.
  • Providing wheel Alignment, Wheel Balancing and vulcanizing services.

The benefits of our products and services are:

  • High-quality and constant all-year-round availability of petroleum products
  • Excellent customer care services.
  • One-stop location for car maintenance, repair and support services.
  • Car wash and mini laundry services.

Our Competitive Edge

Petro Oil Station will succeed by offering its customers high-quality and convenient petrol sale services. We see ourselves as being in the service industry, seeing that there is no significant difference in the products and prices of what we are selling.  Predominantly, Petro Oil Station will succeed by ensuring a full range of customer support service which will include all-year-round availability of quality petroleum products, clear and consistent information to our customers on activities in and around our petrol station, after-sales services including free car wash, customer loyalty programs, provision of automotive repair services including wheel alignment, wheel balancing and vulcanizing services, sales of vehicle spare parts, etc.

 

Form of Business: Limited Liability Company

Owners of Business: Ahmed Onyango and Feysal Mponda

State of Business: New Business (Start-up)

Opening Days: 6:00 AM – 11:00 PM, Monday to Sunday. 

Business Development Consultant: Hussein Boffu

Legal Adviser: Abraham  James

Board of Directors:   

Get the Full Version Now

In the full version, you will have access to the following table of contents:

EXECUTIVE SUMMARY

  • Overview
  • The Company
  • Products and Services
  • Customers/clients

BUSINESS DESCRIPTION

  • Mission
  • Vision
  • Objectives
  • Our Values
  • Keys to Success

PRODUCTS AND SERVICES

MANAGEMENT TEAM

MARKET ANALYSIS AND TRENDS

  • Market Research
  • Petrol station  Industry Trends
  • Our Target Market

COMPETITOR ANALYSIS

  • Competition
  • Competitive Advantage

SALES AND MARKETING PLAN

OPERATIONAL PLAN

  • Opening Days/Hours
  • Location
  • Setup Cost
  • Machinery/Equipment Requirement

SWOT Analysis

PEST Analysis

FINANCIAL PLAN AND PROJECTION

For the complete business plan for starting and running petrol station business in Tanzania, make a payment of $150 (or its equivalent in Tanzanian Shillings TZS 300,000) through Tgo pesa, M-pesa to this number: +255655376543.

Once your payment is done, send an SMS to +255768183677 or +255655376543 with the following details:

  • Your full name.
  • Your email address.

Alternatively, send an email with the above details to info@tanzaniapetroleum.com. The moment we receive your email or SMS and we confirm your payment, the eBook will be delivered to your email address (in PDF) within fifteen minutes.

You can then download it and read it on your smartphone or computer.

If you’re not in Tanzania, send an email to info@tanzaniapetroleum.com and we will devise a payment option for you.

The pipeline project that will pump crude oil from Uganda Oil wells to Tanga port in Tanzania is on everyone ‘s radar. This is because of the vast opportunities the project create across the different sector of the economy.

It’s widely known that from the pre-construction through operation or the finishing phase, opportunities abound for different sets of businesses. Both local and foreign businesses in Tanzania and Uganda Economy. 

The project will demand different kinds of works and will provide different kinds of opportunities at different times or phases.

How do you tap into the opportunities? Do you just sit back and hope you get called to participate? Or you start knocking on office doors of oil and gas companies’ managers and hope they have a stake in the EACOP project?

That is why I am here.

Technically speaking, building the East African crude oil pipeline will require highly specialized skills, technology, and expertise. Much of this is not within its immediate capacity, with virtually little experience in oil and gas.

To be perfectly honest, these are capacities East Africa will instead have to build over time. It is encouraging that even early plans of the project management were seeking to incorporate training and development.

Despite the current limitation, opportunities are immense for local businesses to participate in the commercial aspects of the pipeline projects. And play an immediate role in supporting the oil and gas sector.


Opportunities for local businesses in the projects range from providing goods and supportive services to training and development facilitation as well as conference and industry events coordination.


Tapping into the EACOP project opportunities will require quick thinking, careful planning, and strategic action.


Local businesses looking to participates in this project should evaluate their capabilities, services, or products to identify how these can be modified or the best fist in the pipeline projects.

Also, local businesses should interact with operators, understand their needs, and embrace partnership opportunities with active oil and gas companies in Tanzania and Uganda.

This partnership is a good entry in the sector, To become successful they should make sure that their services and capabilities are meeting with international safety and standards
On the other hand, The project has attracted interest in many foreign service companies.

Leveraging their expertise and experience foreign companies are crucial for boosting local content in the oil and gas projects in Tanzania and East Africa.

Going alone is not the best option for foreign service companies looking to play an immediate and significant role in this project.

Forming a joint venture with a local partner is the best local market access. The foreign firms will get an entry in the local market and local business will learn the rope of the industry with no time if they want to benefits knowledge, expertise and technology transfer from the international firms
Before looking for this partnership, foreign businesses should study the market needs.


They should identify the projects’ and clients’ requirements and ongoing market forces and competition landscape. They should define what is the best entry strategy? They can research the market on their own or by retaining the service of consultants.


It is not enough to understand opportunities abounding the projects. To win works foreign and local businesses should understand the specific clients’ requirements, gather project data. You should understand regulation impacting the local industry.

With pipeline project expected to start on March 2021, both local and international businesses have short time to master it . But collaboration will be vital for their success.

Aminex PLC – oil & gas company focused on Tanzania – Extends longstop completion date for its Ruvuma farm-out agreement with ARA Petroleum Tanzania Ltd to July 31.

ARA Petroleum has agreed not to demand repayment of a USD2 million loan or to charge interest on a separate USD3 million funding arrangement.

ARA Petroleum has agreed to provide additional funding support to Aminex if the farm-out is delayed further by advancing part of the interim period costs, if required. Aminex directors have waived or surrendered their rights to all share options awarded to them on May 1.