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.

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.

Following an evaluation of the exploration potential of the blocks and an assessment of the report of the pre-feasibility phase of the Environmental Impact Assessment (EIA), Sasol has decided to relinquish its exploration license in Blocks 16 & 19 offshore Mozambique.

Sasol was awarded Blocks 16 & 19 in June 2005. Since that time, the comapany conducted deep-water exploration activities in the license areas in a safe and environmentally responsible manner.
With the relinquishment of the deep-water part of the license on 1 July 2013, the shallow water area of the license was retained with a view to define a future work programme to assess the remaining hydrocarbon potential.

Understanding and appreciating the environmental sensitivity of the area, Sasol undertook a robust and transparent pre-feasibility assessment through Golder & Associates, an independent, reputable environmental specialist consulting firm, prior to any exploration activity. This process involved consultation with all relevant stakeholders, from government, on all levels, industry, such as tourism and fisheries, to academia.
Sasol acknowledges all the comments received during the pre-feasibility phase of the EIA process and values the input that all stakeholders contributed.

Sasol will relinquish Blocks 16 & 19 in their entirety to the Government of Mozambique. A withdrawal notification has been issued to the relevant Mozambican authorities.
Sustainability is integral to how Sasol conducts business, which is underpinned by our commitment to compliance with all environmental legislation and undertaking any exploration activity in an environmentally responsible manner.

Sasol is an international integrated chemicals and energy company that leverages technologies and the expertise of our 31 270 people working in 31 countries. We develop and commercialise technologies, and build and operate world-scale facilities to produce a range of high-value product stream, including liquid fuels, chemicals and low-carbon electricity. Sasol was established in 1950 in South Africa and we remain one of the country’s largest investors in capital projects, skills development and technological research and development. The company is listed on the JSE in South Africa and on the New York Stock Exchange in the United States.
(Source: Sasol)

Last week, I had the pleasure to attend the first virtual Mozambique’s energy event organized by IN-VR.

The event provides updates on current status, targets, projects, plans, Fiscal incentives and policies.

For those of you who couldn’t make the entire event, here was the event summary.

1.Eni-Exxon Mobil-led 15.2 MTPA Rovuma LNG projects are expected to reach FID in 2021 and will be fully commissioned 2026.

2.Sixth licensing round reported being launched next year.

3.By 2025/2026, Mozambique will have four operational LNG trains

 4.The country has one small field producing gas since 2004. Operated by Sasol, who supplies the vast majority of gas into South Africa.

5.Drilling project starts in 2021

6.Midstream opportunities are underdevelopment and anticipating a significant increase in activity in the near to mid-term.

I hope this helps.

Mnazi Bay production will increase for the rest of the year, following the end of the rainy season.

Wentworth Resources, a partner in the Tanzanian gas development, expects production to be 65-75 million cubic feet (1.84-2.12 million cubic metres) per day in 2020. Output over the first five months was 58.2 mmcf (1.65 mcm) per day.

COVID-19 restrictions have been lifted, which is also expected to tie in to higher demand for gas. No cases of the virus were reported at Mnazi Bay.

There has been “no impact on operational performance during the COVID-19 pandemic”, Wentworth’s CEO Katherine Roe said.

The partners at the field have agreed a limited work programme, which will cost Wentworth $4.6mn. The company said this would ensure well integrity and support demand.

Wentworth had $15.7mn of cash on hand at the end of May and has no debt. The company will pay a $2 million dividend, announced in April, by the end of June.

Tanzania Petroleum Development Corp. (TPDC) has settled its payments to Wentworth to the end of May. Talks are under way with Tanesco, the power company.

“Emerging from this pandemic, it will be critical for businesses to be able to transparently demonstrate their impact on society as well as their resilience to these types of economic shocks in the future,” said Roe.

“We know that our business has a real opportunity to deliver significant, positive change for the people of Tanzania through gas to power and we are committed to increasing our disclosure on our business risks and impacts to align Wentworth with international best practice.

“The sustainability and ESG landscape is constantly evolving, meaning that this will be an ongoing journey for Wentworth and we look forward to updating you further on our progress later in the year.”

Overview of Mnazi Bay Gas Field

The Mnazi Bay gas field, located in South-eastern Tanzania, started producing gas in 2015 and is being operated by Pertamina-owned Maurel & Prom partnered with Alberta-based Wentworth Resources. The state-owned oil company, Tanzania Petroleum Development Corporation, has a stake in the fieldPower is only available to 32.7% of Tanzanians.