If you rack brains to find perfect business and investment opportunities in Tanzania. Investing in downstream petroleum products is a better option.

With economic growth and an increasing mid-class population, the demand for oil and gas-related products is increasing in Tanzania.

This article explores lucrative business opportunities you can start in Tanzania anytime you ready.

1.Start a 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 on every street corner because they make an insane profit.

Consider this:

A petrol station located in a highbrow area of the city with lots of traffic could sell between than 5,000 liters to 25,000 liters in a day. At least, assuming two-thirds of customers decide to keep malice with you, you’ll still 2,000 liters. Depending on the supplier whom you source fuel from.

The profit margin per liter ranges from 100 to 210 per liter.

So, if you sell 2,000 liters a day will make you TZS 100 × 2000 = TZS 200,000. In a month, you will have a profit margin of TZS 30 × 200,000 = TZS 6,000,000.

That figure can vary widely, depending on where the petrol station is located. And the supplier from whom you source fuel from.

For example, if the profit margin from your supplier is TZS 200 per liter. So for that rate, the profit margin per day would be TZS 200 × 5,000 = TZS 400,000.

Again, in a month, that will make you 30 × TZS 400,000 = TZS 12,000,000. So, this is why petrol stations are on every street corner because they make good money. So, everyone wants to jump into this business.

Related Project::A Sample Business Plan for Starting and Running a Road Logistics and Transportation Business for Fuel/Petroleum Products in Tanzania.

2.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 biggest 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. Although 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.

3.Gas Retailing/Distribution

Cooking gas or LPG distribution is one of the most profitable oil and gas business opportunities. Yes, it demands medium scale capital investment. You also need to have proper licensing from the relevant government agency. Also, the market for cooking gas distribution is increasing.

Related Project: A Sample Business Plan for Starting an LP Gas (Cooking Gas) Distribution/Retailing Business in Tanzania: A Business Plan for one Quick Gas Limited.

4.Lubrication Oil Retail Shop

Selling engine oil, brake fluid and hydraulic oil et al. is a profitable and highly thriving business venture an entrepreneur who is interested in making money from the oil and gas business value chain should consider. The fact that 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 a great profit. The various needs of lube oils in homes, organizations, factories, and industries just cannot be overemphasized because the population of people who have mechanical need for oil has continued to increase over the years. So, for you to start out in this trade, have an expert carry out good feasibility studies.

5.Oil Farm/Depot Storage Services

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

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6. Products (Fuel) Haulage and Logistics/

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 capacity of the truck.

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 by transporting petroleum products to landlocked countries like Uganda, Rwanda, Congo DRC, etc. Many transporters in this business transit fuel to neighboring countries such as Uganda, Kenya, Rwanda, and Congo DRC because there is an unlimited market and is more profitable for transit fuel to the neighboring countries than relying on transporting petroleum products from depots to filling stations locally across the country.

7. 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.

8. 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.

                                      I hope this helps. Here at Tanzania Petroleum we are committed to champion extraordinary outcome by accelerating start, run and growing your business

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.

Related Project: A Detailed Feasibility and Project Report on Setting up and operating a Profitable Petrol Station in Tanzania

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

We have written a business plan for  a business Plan for setting up and operating an LP Gas (Cooking Gas) Distribution/Retailing Business in Tanzania:

LP Gas business plan in Tanzania help not only translate your ideas into business and your dreams 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 be used as ongoing tool to manage your business and win competition.

A Sample Business Plan for Starting an LP Gas (Cooking Gas) Distribution/Retailing Business in Tanzania: A Business Plan for one Quick Gas Limited

Road Transport of Fuel/Petroleum products is a profitable business in Tanzania and East Africa that need a lot of strategic plan to start. This business plan will be used to define the scope of our services, as well as a means of gaining the necessary investment to open the company. It will also be used continually  in the evaluation of road transport of fuel business’s  mission, goals and objectives.

Executive Summary

ARA transport is an indigenous energy, logistics and transportation service company duly registered and it has obtained a license to transport petroleum products across the country. The company is formed following the increasing demand of petroleum products (example, premium motor spirit, diesel, kerosene, and other petroleum products) in Tanzania. The company primarily focuses on transporting petroleum products from oil depots to the desired destination across the country.

The company has drivers who are helpful, courteous and fully trained to handle hazardous materials. They have licenses so there will be no need for company’s training. Our trucks will be clean, well-maintained and inspected regularly for safety and comfort.

At ARA Transport, our philosophy is one that emphasizes service in the real sense of the word and the realization that effective communication is key factor in our business. The company also realizes that in this competitive market, flexibility and professionalism maintain that leading edge.

The biggest strength of ARA transport is its personnel since experienced and trained drivers who can take care of transportation of petroleum products from depots are the heart of this business.

Mission

The company’s mission is to provide reliable, timely and safe logistics services in the downstream sub-sector of the oil and gas industry.

Vision

To become the leading energy logistics service company in its area of operation by offering services with superior customer value.
To be a reliable partner and act proactively to fulfill all the needs of its customers by delivering tailored petroleum products logistics services.

Objectives of the Company

• To purchase two more trucks/fuel tankers in the next three years.
• To extend its operation by acquiring the license to transit petroleum products to the landlocked countries including Uganda, Tanzania, Kenya, Rwanda and DR Congo after three years of operation.

Services Description

Road Transport of Petroleum Products: ARA Transport is engaged in the road transport of petroleum products from the oil depots to the desired destination across the country. The company transports all petroleum products such as: AGO (Automotive Gas Oil – Diesel), PMS (Premium Motor Spirit – Petrol), IK (Illuminated Kerosene), Jet – A1, HFO (Heavy Fuel Oil), IDO (Industrial Diesel Oil) etc.

Competitive Edge

Human resources: We believe that drivers are the life (blood and oxygen) of logistics and transportation business. Your drivers can make or mar your transportation business, so recruitment will be a top company priority. We will make sure that drivers are licensed and well-trained to drive fuel/petroleum tankers/trucks.

Maintenance: Our research has shown that most of the haulage and logistic companies do not carry out a regular maintenance of their vehicles. They do maintenance when their truck breaks down. AT ARA Transport, we shall promote the life span of our truck by ensuring and putting in place systematic maintenance routines. As our business grow and more trucks are bought, we will hire an in-house mechanic to handle maintenance and repairs.

Business Ownership and Structure

Promoter: Khalid Magombeka
Khalid is passionate about the oil and gas industry and the logistic and transpiration business. For the first three years of operation, Khalid will handle many responsibilities as Managing Director/ Truck supervisors / Accountant and head of marketing. After three years of operation, the company will be in the expansion stage and will recruit people to handle these responsibilities.

Business advisor: Said Saleem has spent over 10 years in downstream sub-sector of the oil and gas industry in Tanzania. He owns five petrol stations in Dar es Salaam and he’s also the managing director of Saleem Transport Limited which transports petroleum products in Tanzania and neighbouring countries including Rwanda, Burundi Congo DRC etc.

GET THE FULL VERSION

To get the full version of this business plan which includes the breakdown of startup cost, SWOT analysis, marketing strategies, management plan and financial plan, reach out to us via Hussein.boffu@tanzaniapetroleum.com or +

Can I be painfully honest with you?

No, not thank-God-he-told-me kind of honesty, where someone points out a gutter in front of you in the middle of the night.

It’s brutal, bitter, and downright ugly.

Have you noticed it? In your city, boutiques are empty, restaurants are closing up, and even the streets are getting emptier by the day.

Yet, economic activities are still going on.

But what you will also notice, if you look hard and well, is that some businesses are also starting up.

To be specific, here are trending business opportunities:

1. Provide goods and services to oil and gas companies in East African crude oil pipeline( EACOP)Projects.

The implementation of key infrastructure projects in the oil and gas is boosting the demand for high-quality local suppliers of goods and services.

On the horizon, the East African Crude Oil Pipeline project which will be constructed to transport crude oil from the oil fields in Hoima, Uganda to Tanga port in Tanzania holds the promise of thousands new jobs and services 

And you know why?

People are thinking of ways to tap into the opportunities that abound in the project. Maybe you have been thinking the same, too.

Why not? When it made newspaper headlines, we were told that:

The host countries(Uganda and Tanzania) have signed host government agreement (HGA)

The pipeline will cost $3.5 Billion USD, increase direct foreign investment by 60% in Uganda and Tanzania, and facilitate oil and gas development in the region.

The project is expected to start March on 2021

“Wow!” I hear you say. “Oil and gas here I come.”

But how?

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?

 This is the perfect time to position yourself to win the competition and meeting the growing demand for goods and services in the project 

2.Start Petrol Station business 

Petrol stations line every street corner. More people are consuming more fuel.

Consider this:

· People are buying more cars. Look at all the cars on the highway—thousands of them—they buy fuel from petrol stations.

· There is still a power-failure problem in the country, so, people depend on generators—both diesel and petrol powered. They have to buy fuel from petrol stations.

· Aside from that, we’re no longer in the Stone Age where people cook with logs of wood. Now, they simply buy kerosene from a petrol station for their cooking. Those who don’t use kerosene use cooking gas, which they buy from petrol stations.

There’s an available market to sell to in all the above. Besides selling petrol, diesel, kerosene, cooking gas, and engine oil, those petrol stations:

· Offer car washing services.

· Offer car repair services.

· Have a restaurant and, in some cases, a bar.

· Have a shopping mall.

· Even rent out vacant offices to companies like DSTV, telecommunication companies, etc.

So this is your opportunity to start a petrol station.

3.Start LP Gas (Cooking Gas) retailing Business: 

There has been a substantial rise 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 an 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 relationships as well as providing complementary services, the newly-established LP Gas retailer can still be profitable and assured of recovering its entire investment.

4.Set up Industrial Training Institution:

The massive discoveries of massive natural gas in Tanzania, along with the resulting investments in infrastructure such as ports, oil and gas pipelines, and renewable energy projects, have created a significant demand for local workers in Tanzania. These developments present an opportunity for economic growth and employment boost across the region. 

The sad reality is that this opportunity is hampered by a lack of availability of enough skills among the local population. The limited availability of technical vocational education and training (TVET) that is sufficiently matched to industry requirements causes the skills gap to grow at the local level.

Start industrial training and development business and transforming the local population from just followers to be world-class professionals and industry leaders is key to support continued economic development in Tanzania.

Bonus

5.Start Rice and Maize Flour Processing Plants

Maize flour(popularly Sembe and Dona) is a staple food for a large proportion of the population in Tanzania including poor and common men who use it regularly. With Tanzania’s, rapidly growing population means more demand for affordable staple foods. The maize milling plant business is a profitable business opportunity for entrepreneurs.

I hope this help.

At Tanzania Petroleum, we are committed to helping people make their entrepreneurship dreams come true in this most valuable oil and gas industry in Tanzania.