How to Start a Gas Business in Nigeria (Step-by-Step Guide)

Starting a gas business in Nigeria involves selecting the right type of gas business, securing a suitable location, registering your company with CAC, obtaining NMDPRA licenses, and installing the necessary equipment. With startup costs ranging from ₦9.9 million for a mini gas plant to over ₦80 million for larger configurations, this industry offers scalable options for investors. Proper planning, compliance with regulations, and expert guidance are crucial to avoid costly fines and ensure your business operates smoothly.

In this guide, we'll walk you through each step, from registration to construction, so you can launch your gas business with confidence.

As a construction company, we build gas plants, we go beyond basic construction. Our team meticulously manages, subcontracts, and implements rigorous quality control measures at every step. This ensures your gas storage facility is functional and built to the highest safety standards.

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There are different types of gas businesses in Nigeria, and you must decide which one best suits your budget and goals.

Types of Gas Businesses You Can Start:

1. LPG Gas Plant (Filling Station) – For refilling gas cylinders and distributing them to households & businesses.

2. Gas Retail & Distribution Business – Buying LPG in bulk and reselling to retailers or end users.

3. Gas Cylinder Sales & Rental Business – Selling and leasing gas cylinders to customers.

4. LPG Transportation Business – Operating gas trucks to transport LPG for distributors and plants.

5. Gas Accessories & Equipment Sales – Selling gas burners, cylinders, valves, and related products.

Each type of gas business has different capital requirements and licensing needs, so consult an expert before investing.

Before starting any business in Nigeria, you must register it legally with the Corporate Affairs Commission (CAC).

How to Register Your Gas Business with Our Legal Team:

1. Contact our legal team to handle your CAC business registration hassle-free.

2. We will check the availability of your business name and reserve it online.

3. Our team will fill out the required forms and upload the necessary documents.

4. We handle the CAC registration fee payment & submission.

5. Once approved, you receive your Certificate of Incorporation for your oil and gas business.

Having a registered business name is necessary for obtaining NMDPRA approvals and opening a corporate bank account.

📌 Need CAC registration assistance? Contact us t

Key Requirements for Choosing a Suitable Location:

✅ Land Size – Must be at least 2,000 sqm to allow for safe operations.
✅ Distance from Residential & Sensitive Areas – The land must not be close to schools, hotels, residential areas, mosques, or churches.
✅ No Proximity to Waterways – The location must not be near a river, drainage, or flood-prone area.
✅ Safety Setback – A 30-meter setback is required from the wall or fence for safety compliance.
✅ Not Under High-Tension Power Lines – The gas business must not be located directly under power lines to avoid hazards.
✅ Railway Clearance – The land must have an adequate setback from any railway to prevent accidents or restrictions.
✅ Registered Survey Plan – A registered survey plan is required for the land to ensure legal compliance and approvals. We provide land survey and documentation services to assist investors in meeting this requirement.

📌 Need land survey & documentation services?
Contact Our Land Survey And Documentation department today! Land Survey And Documentation

Using an Existing Petrol Station for a Gas Business

If you decide to rent or use land within an existing petrol station, the following additional requirements must be met:
✅ Adequate Space – The petrol station must have enough space to accommodate the gas plant configuration.
✅ Safety Setbacks:

• 5 meters from the wall.

• 15 meters from the nearest petrol dispenser.

• 20 meters from the admin building.
  ✅ Valid Petrol Station License – The petrol station must have a current operating license to be used legally.

Gas businesses in Nigeria are regulated, and obtaining licenses from NMDPRA (Nigerian Midstream and Downstream Petroleum Regulatory Authority) helps avoid penalties.

Key Licenses & Approvals You Need:

1. NMDPRA Gas Plant License – Required for setting up a gas plant.

2. Fire Safety Permit – From the Fire Service for fire prevention compliance.

3. Environmental Impact Assessment (EIA) – Approval from the Ministry of Environment.

4. Town Planning Approval – To ensure your business is in a permitted location.

5. Weigh & Measures Certification – If you are selling LPG by weight.

6. Architectural Drawings – Required for plant design approval.

7. Tax Clearance Certificate – To confirm tax compliance.

8. Land Use Charge Receipt – Proof of payment for land use charges.

9. Proof of Ownership – Legal documentation confirming land ownership.

10. Survey Plan – A registered survey plan to confirm land suitability.

11. Structural Drawings – Detailed structural designs for plant approval.

12. COREN Structural Stability Letter – Certification for the structural integrity of the site.

13. COREN Supervision Letter – Confirmation that a registered engineer will supervise construction.

14. Pundit Test Report – Concrete strength analysis report.

15. COREN Calculation Sheets – Structural calculations for safety compliance.

16. Subsoil Investigation Report – Analysis of the soil condition for foundation stability.

17. Electrical Drawings – Approved electrical layouts for power supply safety.

18. Mechanical Drawings – Designs for mechanical systems and equipment.

19. PPTR Report – Petroleum Product Technical Report for safety compliance.

20. Police Clearance – Security clearance for operational safety.

21. Fire Clearance – Certification from the fire service ensuring fire safety compliance.

We Handle the Entire Process from Start to Finish!

At One Mass Energy, we don’t just assist with paperwork—we handle the entire process from beginning to end!

✅ Land Inspection & Verification – Ensuring your site meets all safety and regulatory requirements.
✅ Licensing & Approvals – Fast-tracking all necessary documents so you don’t face delays.
✅ Project Supervision & Compliance – Our experts oversee construction to meet NMDPRA standards.
✅ Final Handover – We ensure your facility is 100% ready, legally compliant, and fully operational before handover.

💡 Most investors fail because they try to do it alone. We ensure a smooth, hassle-free process so you can focus on running a profitable gas business!.

🚀 Want to build a successful gas business without regulatory stress? We’ve got you covered!

📌 Contact Us for Full Licensing & Compliance Assistance
📩 Email: Admin@onemassenergy.com
🌍 https://www.ome.construction/energy-division/oil-gas-investment-consulting

🔥 Avoid costly mistakes—let experts handle everything while you focus on making money!

Once your land is approved, the next step is to install the required equipment for your gas business.

Basic Equipment Needed for a Gas Plant:

1. Gas Storage Tanks (Based on capacity: 2.5MT, 5MT, 10MT, etc.)
2. Dispensing Pumps & Hoses
3. Pressure Gauges & Valve
4. Firefighting Equipment (Fire Extinguishers, Sprinklers, etc.)
5. Safety Signage & PPE (Protective gear for workers)

Essential Infrastructure Required for a Functional Gas Plant:

1. Admin and Cashier Building – for operations and financial control
2. Parking Space – for customers and delivery vehicles
3. Firewall – required only if there are adjoining buildings (for safety separation)
4. Generator House – for backup power supply
5. Gatehouse – for security checks
6. Gate – to secure the facility
7. Overhead Water Tank – supports fire safety systems
8. Fire Hydrant – critical for firefighting and safety compliance
9. Dispenser Area – where customers refill their cylinders

💡 We help investors set up FULLY functional gas plants from start to finish — including all necessary infrastructure, equipment, and safety requirements to meet NMDPRA standards.

Running a gas business requires trained personnel to ensure safety and efficiency.

Essential Staff for Your Gas Business:

✅ Plant Manager – Oversees daily operations.
✅ Sales Attendants – Handles gas refilling & customer service.
✅ Safety And Security Officers – Ensures compliance with NMDPRA & fire safety regulations.
✅ Truck Drivers (For Gas Transportation Business)

🚨 All staff must be trained in fire safety & emergency response.

Once your business is ready, you need customers! Here are ways to attract & retain clients:

Marketing Strategies for a Gas Business:

✅ Social Media Marketing – Advertise on Facebook, Twitter, Instagram, and WhatsApp.
✅ Google My Business – Register so local customers can find you online.
✅ Partnerships – Partner with hotels, restaurants & households that use gas.
✅ Discount Offers – Offer promotions to attract new customers.
✅ Referral Programs – Reward customers who refer others to your business example give bike men who bring gas cylinders to you a very.

💡 Need help marketing your gas business? Our digital marketing department provides full digital marketing services!

Now that you're excited to embark on your journey in the gas business let's delve into the essential materials you'll need to get started.
Remember, the specific requirements might vary based on the size and scale of your operation which we will expand on later in our conversation. Here's a detailed breakdown of the equipment you will need for your gas business:

When selecting the appropriate LPG storage tank for your business, it’s crucial to consider your projected customer base and daily gas demand. Here’s a guide to help you choose the best capacity for your needs, ranging from 1.5 tons to 10 tons, including options for single and twin tank configurations.

Twin Tank Configurations:

1. Twin 2.5 Tons (New):

   • Ideal For: Small businesses or moderate customer traffic.

   • Benefits: This budget-friendly option allows you to manage lower volumes efficiently, making it perfect for starting a small business.

2. Twin 3.5 Tons (New):

   • Ideal For: Medium-sized stations with steady customer flow.

   • Benefits: Offers a good balance between capacity and affordability, ensuring you can handle a consistent stream of customers without over-investing.

Single Tank Configurations:

1. Single 1.5 Tons (New):

   • Ideal For: Very small businesses or low customer traffic areas.

   • Benefits: An affordable and efficient option for businesses just starting or serving a niche market with lower LPG demands.

2. Single 2.5 Tons (New/European-Used):

   • Ideal For: Businesses with moderate customer demand.

   • Benefits: A versatile option that balances capacity and cost, suitable for growing businesses aiming to expand their customer base gradually.

3. Single 3.5 Tons (New/European-Used):

   • Ideal For: Stations with regular customer flow and medium to high demand.

   • Benefits: Provides ample capacity to serve a larger customer base without the need for frequent refills, enhancing service efficiency.

4. Single 5 Tons (New/European-Used):

   • Ideal For: Stations anticipating high demand.

   • Benefits: Perfect for handling large LPG volumes, this setup maximizes service capacity, ensuring you can meet peak demand without interruptions.

5. Single 10 Tons (New/European-Used):

   • Ideal For: Stations with exceptionally high LPG demand.

   • Benefits: The most heavy-duty option available, catering to high-demand areas and large-scale operations. This ensures you have a robust supply to meet customer needs consistently.

These are machines used for the selling of Liquefied Petroleum Gas (LPG) from the tank into the gas cylinders.

Here's a breakdown of the different types of dispensers available for different LPG gas station configurations, categorized by different functionality.

Dispenser Type:

Locally Assembled (Single Meter, Double Nozzle): This is a cost-effective option that provides basic functionality for dispensing LPG. It's suitable for stations with lower customer traffic or those starting their business.

Locally Assembled (Double Meter, Double Nozzle): Similar to the single meter option but allows for faster service by enabling you to serve two customers simultaneously.

Foreign (Double Meter, Double Nozzle): This high-efficiency setup caters to high-traffic stations by allowing customers to fill two LPG tanks at once, significantly increasing throughput.

Foreign (Single Meter, Double Nozzle): Offers a balance between affordability and features compared to foreign dispensers for larger tanks. It equips your station with a potentially more advanced dispenser while maintaining a smaller tank size.

Foreign (Cleantech) Dispenser: This advanced option provides additional features like digital displays and data management capabilities, potentially improving efficiency and customer experience.

High-quality piping and valves designed specifically for LPG are crucial. Improper materials can lead to leaks and safety hazards.

Regulators control gas pressure to ensure safe and efficient appliance use. Different appliances require specific pressure ranges.

You'll need equipment to transfer LPG from bulk suppliers to your storage tanks. This might involve:

Transport Truck: A dedicated LPG transport truck for bulk purchases or contracting a supplier with delivery options.

Pumps:

Major Pump: A high-capacity pump (e.g., 7.5 HP) for efficiently filling large storage tanks.

Backup Pump: A smaller pump (e.g., 5 HP) as a backup in case the main pump malfunctions.

Hoses: Secure, leak-proof hoses designed for LPG transfer.

Delivery Vehicles:

Invest in reliable vehicles to transport filled gas canisters to customers. Options include vans or small trucks with secure compartments for cylinders.

Prioritize a safe working environment for yourself and your employees. Essential safety equipment includes:

Fire Extinguishers: Strategically placed fire extinguishers of the appropriate type (ABC or BC) for extinguishing LPG fires.

Leak Detectors: Electronic or combustible gas detectors to identify potential leaks promptly.

Personal Protective Equipment (PPE): Provide employees with appropriate PPE like safety glasses, gloves, and respirators for handling LPG.

Equip yourself to serve your customers efficiently:

Weighing Scales: Ensure accurate gas filling and pricing with a reliable weighing scale.

Point Of Sale Device: Consider a POS system for streamlined billing and record keeping (optional but recommended).

By carefully selecting these materials and prioritizing safety, you'll be well prepared to establish a successful and reliable gas business! Remember, partnering with a reputable supplier like Pawa Energy can provide high-quality equipment, expert advice, and ongoing support throughout your journey.

Here's a breakdown of the essential materials needed for different LPG gas station configurations, categorized by tank capacity and dispenser type.

Tanks: 2 x 2.5 Ton LPG storage tanks (New)

Dispenser: Assembled Dispenser (Single Meter, Double Nozzle)

Piping and Valves: High-pressure piping suitable for LPG, valves, and fittings for connecting tanks and dispensers

Shelter/Canopy: Weatherproof shelter or canopy to cover the dispenser area

Safety Equipment: Automatic shutoff valve, fire extinguishers, leak detectors (as per regulations)

Construction Materials: Base for tanks, concrete or other approved material for dispenser area

Tanks: 2 x 3.5 Ton LPG storage tanks (New)

Dispenser: Choose one based on your needs:

Assembled Dispenser (Single Meter, Double Nozzle)

Assembled Dispenser (Double Meter, Double Nozzle)

Foreign Dispenser (Double Meter, Double Nozzle)

Piping and Valves: High-pressure piping suitable for LPG, valves, and fittings for connecting tanks and dispensers

Shelter/Canopy: Weatherproof shelter or canopy to cover the dispenser area

Safety Equipment: Automatic shutoff valve, fire extinguishers, leak detectors (as per regulations)

Construction Materials: Base for tanks, concrete or other approved material for dispenser area

Single 5 Tons (New/European-Used)

Tanks: 1 x 5 Ton LPG storage tank (New or European-Used)

Dispenser: Choose one based on your needs:

Foreign Dispenser (Double Meter, Double Nozzle)

Foreign (Cleantech) Dispenser (Double Meter, Double Nozzle)

Piping and Valves: High-pressure piping suitable for LPG, valves, and fittings for connecting tanks and dispensers

Shelter/Canopy: Weatherproof shelter or canopy to cover the dispenser area

Safety Equipment: Automatic shutoff valve, fire extinguishers, leak detectors (as per regulations)

Construction Materials: Base for the tank, concrete or other approved material for the dispenser area

Single 10 Tons (New/European-Used)

Tanks: 1 x 10 Ton LPG storage tank (New or European-Used)

Dispenser: Foreign (Cleantech) Dispenser (Double Meter, Double Nozzle)

Piping and Valves: High-pressure piping suitable for LPG, valves, and fittings for connecting tanks and dispensers

Shelter/Canopy: Weatherproof shelter or canopy to cover the dispenser area

Safety Equipment: Automatic shutoff valve, fire extinguishers, leak detectors (as per regulations)

Construction Materials: Base for the tank, concrete or other approved material for the dispenser area

The cost of starting a gas station business in Nigeria can vary depending on several factors, including the size of your storage tanks, the type of dispenser you choose, and whether you opt for locally assembled or foreign dispensers. This guide will break down the estimated costs for various station setups, helping you determine the initial investment needed to get your gas business up and running.

Key Cost Factors:

Tank Capacity: Larger storage tanks will naturally cost more. You must consider your projected demand and budget to determine the optimal tank size.

Dispenser Type: There are two main dispenser configurations: single meter with double nozzle (allowing customers to fill two vehicles simultaneously) and double meter with double nozzle (offering the ability to serve four cans simultaneously). Double meter dispensers generally cost more.

Local vs Foreign Dispensers: Locally assembled dispensers are a more budget-friendly option, while foreign brands may offer potentially better quality and features, impacting the price.

1.5 Metric Ton LPG Skid Plant

With Locally Assembled Dispenser

• Single Meter, Double Nozzle: ₦6,940,000

• Double Meter, Double Nozzle: ₦7,540,000

With Foreign Cleantech Dispenser

• Single Meter, Double Nozzle: ₦9,240,000

• Double Meter, Double Nozzle: ₦9,840,000

2.5 Metric Ton LPG Skid Plant

With Locally Assembled Dispenser

• Single Meter, Double Nozzle: ₦9,300,000

• Double Meter, Double Nozzle: ₦9,900,000

With Foreign Cleantech Dispenser

• Single Meter, Double Nozzle: ₦11,600,000

• Double Meter, Double Nozzle: ₦12,300,000

3.5 Metric Ton LPG Skid Plant

With Locally Assembled Dispenser

• Single Meter, Double Nozzle: ₦10,750,000

• Double Meter, Double Nozzle: ₦11,350,000

With Foreign Cleantech Dispenser

• Single Meter, Double Nozzle: ₦13,050,000

• Double Meter, Double Nozzle: ₦13,750,000

5 Metric Ton LPG Skid Plant

• Skid Plant Setup: ₦27,880,000

• Gas Plant Setup: ₦30,880,000

10 Metric Ton LPG Skid Plant

• Skid Plant Setup: ₦40,280,000

• Gas Plant Setup: ₦43,280,000

Double 2.5 Metric Ton LPG Skid Plant

With Locally Assembled Dispenser

• Single Meter, Double Nozzle: ₦15,538,300

• Double Meter, Double Nozzle: ₦16,218,300

With Foreign Cleantech Dispenser

• Single Meter, Double Nozzle: ₦17,918,300

• Double Meter, Double Nozzle: ₦18,618,300

Double 3.5 Metric Ton LPG Skid Plant

With Locally Assembled Dispenser

• Single Meter, Double Nozzle: ₦18,268,900

• Double Meter, Double Nozzle: ₦18,868,900

With Foreign Cleantech Dispenser

• Single Meter, Double Nozzle: ₦20,568,900

• Double Meter, Double Nozzle: Pending completion of updates.

For detailed pricing tailored to your location and specific business requirements, visit our LPG Pricing and Cost Overview section, where you'll find updated price listings and financial options to kickstart your gas business quickly.

Notes:

• Delivery Time: 7-14 days

• Transport Costs: ₦150,000 - ₦700,000

Safety is paramount in the gas business. A well-designed and secure storage facility is essential. There are two stages to building a gas plant in Nigeria, and they are explained below:

Pre-Construction Phase:

At this stage, our qualified civil engineers and technicians ensure your facility adheres to DPR regulations, state building regulations and safety standards. This includes location selection, Land survey, foundation design, and setback requirements for gas storage tanks.

Land Survey and Documentation:

We conduct a land survey to determine site suitability, topography, and potential challenges.

We assist with obtaining necessary permits and approvals from local authorities.

Architectural Design:

We design the arrangement for the gas storage tanks to integrate seamlessly into the overall layout.

We also design ancillary buildings like offices, control rooms, or security posts into the overall layout.

Structural Engineering:

We design the foundation and support structures for the gas storage tanks, considering weight, seismic loads, and wind resistance.

Please comply with building codes and safety regulations for gas storage facilities.

Safety Planning:

Develop a comprehensive safety plan for the construction phase, including hazard identification, risk mitigation strategies, and emergency response protocols.

Design safety features like blast walls or fire suppression systems (depending on storage capacity).

Environmental Impact Assessment (EIA):

Conduct an EIA to assess the potential environmental impact of the project and propose mitigation measures.

Construction Phase:
We prioritize safety practices throughout the building process. This might involve blast walls (depending on storage capacity) and proper ventilation systems.

We'll be sure to follow the following steps to build your gas storage facility for your gas business in Nigeria.

Site Preparation:

We handle excavation, grading, and foundation work according to the structural design.

6. • We ensure proper drainage to prevent water accumulation around the storage tanks.

7. Construction:

   • I'd like you to please oversee the construction of the gas storage facility, including the foundation, platform, and any ancillary buildings.

   • Manage construction materials, schedule subcontractors, and ensure quality control.

8. Commissioning and Testing:

   • Coordinate with relevant authorities for inspections and pressure testing of the gas storage tanks.

Please ensure all safety systems and equipment are functioning correctly before operational handover.

Financing Options for Your Gas Storage Tank Installation in Nigeria:

The upfront cost of gas storage tanks and equipment can concern new businesses. Here are some financing options to consider:

• Small Business Loans: Several banks and financial institutions offer loans specifically for small businesses.

• Partnerships and Joint Ventures: Strength in Numbers! Partner with friends, family, or a cooperative to pool resources and share the financial burden. Alternatively, you can explore joint ventures with individuals with similar business interests, leveraging combined expertise and capital.

• Crowdfunding Platforms: Embrace the power of the crowd! Online platforms connect your business with a network of potential investors who contribute smaller amounts collectively. This approach can be a great way to raise capital, especially for community-focused gas stations.

Do You Have What It Takes to Be Our Partner?

If you're passionate about entering the gas station business but require funding assistance, we can help! (Assuming you have a section on your blog dedicated to connecting potential partners). Our platform connects aspiring entrepreneurs with interested investors seeking opportunities in the LPG sector.

Is the Gas Business Profitable in Nigeria?

The Nigerian gas business offers exciting possibilities, but profitability depends on several factors like location, customer base, and how efficiently you run your operations. However, the booming demand for clean cooking fuel paints a promising picture. Let's delve into the potential benefits and use a real-world example to illustrate the profit potential:

High Demand and Growing Market:

With more and more Nigerian households and businesses switching to LPG, the demand for reliable gas retailers is on the rise. This consistent demand translates into a stable customer base for your gas station.

Promising Profit Margins:

The profit margin on LPG sales can be inviting, mainly if you focus on efficient operations and exceptional customer service. Let's take a look at a potential real-world scenario:

Example: Calculating Profit Potential

• ARDOVA LPG Depot in Ijora, Lagos, sells 20 metric tons of gas for ₦20,100,000. (One metric ton equals 1,000 kg).

• Assuming a gas storage facility with a capacity of 10 tons buys this LPG.

• This translates to a purchase cost of ₦20,100,000 / 20 tons = ₦1,005,000 per ton of LPG.

• Since a ton equals 1,000 kg, the cost per kilogram would be ₦1,005,000/1,000 kg = ₦1,005 per kg.

Reselling at Consumer Price:

• If the gas station resells this LPG to consumers for ₦1,260 per kg, the profit per kg would be ₦1,260 - ₦1,005 = ₦255.

Profitability Potential:

By selling 10 tons (10,000 kg) of LPG at this margin, the gas station could potentially earn a profit of ₦255/kg * 10,000 kg = ₦2,550,000.

This example demonstrates the potential profitability of the gas business. However, it's important to remember that actual profits may vary.

Starting a Gas Business in Nigeria: Regulations and Permits:

A legal and compliant gas business requires obtaining licenses and permits from the Department of Petroleum Resources (DPR). The specific license category (General or Major) will depend on the size and scale of your operation. We help you navigate the application process and ensure your business meets all regulatory requirements.

Partnering for Success with OME:

OME is a leading provider of LPG solutions in Nigeria. You offer a wide range of services to support your gas business journey, from helping you source high-quality gas storage tanks and equipment to connecting you with qualified technicians for safe installation.

Following these steps and partnering with reliable suppliers like Pawar Energy, you can launch and operate a profitable gas business in Nigeria. Safety is paramount, and seeking expert guidance can ensure your business thrives while adhering to the highest safety standards.