Starting a small-scale LPG (Liquefied Petroleum Gas) business in Nigeria is a profitable venture due to the increasing demand for cooking gas. More Nigerians are switching to LPG as a cleaner and more efficient fuel source compared to kerosene, charcoal or firewood.
If you want to invest in this business, this step-by-step guide for 2025 will help you understand the requirements, costs, and strategies needed to set up a successful small-scale LPG gas business in Nigeria.
Are you considering venturing into the LPG gas plant business or already running one? Don't let unexpected losses derail your success. GET YOUR COPY NOW!!!
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Why Start an LPG Gas Business in Nigeria?
The LPG market in Nigeria is growing rapidly due to:
> More households and businesses are using LPG for cooking, heating, and industrial purposes.
> The Nigerian government is promoting LPG usage through subsidies and incentives.
> The business offers quick returns on investment (ROI) with steady cash flow.
>You can start small and expand into a larger gas plant as your business grows.
Now, let’s look at what you need to set up a small-scale LPG gas business in Nigeria.
Step 1: Decide on the Type of LPG Business
Before investing, you need to choose the type of LPG business that suits your budget and market. The most common small-scale LPG businesses include:
1. LPG Retailing (Gas Refilling Shop): Selling LPG to customers using gas cylinders. Requires a small shop and gas storage, mainly 50kg and 25kg.
2. Mini LPG Plant (Bulk Storage & Distribution): A small plant with a 1.5 to 2.5-ton storage tank for refilling customers’ gas cylinders.
3. LPG Cylinder Sales & Rental: Selling and renting gas cylinders to customers.
4. LPG Accessories Sales: Selling gas burners, hoses, regulators, and other LPG equipment.
For beginners, starting with LPG retailing or a mini gas plant is the best option.
Step 2: Register Your Business and Get Licenses
To operate legally in Nigeria, you need to register your business and obtain necessary permits from regulatory bodies. Here’s what you need:
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1. Business Registration
Register your LPG business with the Corporate Affairs Commission (CAC) in Nigeria. This gives your business a legal identity.
2. LPG Licensing and Permits
You will need approvals from:
- Department of Petroleum Resources (DPR) / NUPRC – To obtain a license for selling LPG.
- Local Government Authority – To approve your business location.
- Fire Safety Certificate – From the state fire service to ensure compliance with fire safety rules.
- Standards Organization of Nigeria (SON) – To help know if your equipment meets safety standards.
Getting these approvals can take 2-4 weeks, so apply early.
Step 3: Secure a Good Location
Choosing the right location is important for success. Consider:
• The shop or plant should be easily reachable by customers and suppliers.
• LPG businesses must be at least 15 meters away from residential areas, schools, or hospitals.
• Locations near markets, busy roads, or residential estates attract more customers.
If starting a mini gas plant, make sure your land meets NUPRC safety requirements.
Step 4: Buy Equipment and Set Up Your Business
The equipment you need depends on your business type.
> For LPG Retailing (Small Shop)
- Gas cylinders (various sizes: 3kg, 6kg, 12.5kg, 50kg)
- Digital weighing scale (to measure gas refills)
- Gas hose, regulators, and safety gloves
- Fire extinguisher (mandatory for safety)
For a Mini LPG Gas Plant (1.5 to 2.5-Ton Storage Tank)
- LPG storage tank (costs ₦3.4M to ₦5M)
- Gas pump and dispenser
- Pressure gauges, valves, and pipes
- Fire sprinkler system
- Safety signs and gas leak detectors
A mini LPG gas plant requires professional installation to meet safety regulations.
Step 5: Put In Place Safety Measures and Protocols
LPG is highly flammable, so safety is the top priority. To prevent accidents:
> Train Your Staff: Teach them how to handle gas safely.
> Install Fire Equipment: Fire extinguishers, sprinklers, and gas leak detectors.
> Monitor Storage: Always check for gas leaks and avoid overfilling cylinders.
> Always comply with safety rules from the fire service and NUPRC.
Step 6: Find Reliable Suppliers
To keep your business running, you need a steady gas supply. Purchase LPG from major gas depots in Nigeria, such as:
Are you considering venturing into the LPG gas plant business or already running one? Don't let unexpected losses derail your success. GET YOUR COPY NOW!!!
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• NIPCO Plc
• Techno Oil Gas Depot
• Rainoil Gas
• Matrix Energy Gas Depot
You can compare prices from different suppliers to get the best deal.
Step 7: Market Your LPG Business
To attract customers, use smart marketing strategies:
> Use Signboards: Place a visible sign outside your shop or plant.
> Social Media: Promote your business on Facebook, Instagram, and WhatsApp.
> Offer Home Delivery: Provide gas refill delivery services to customers.
> Partner with Restaurants & Hotels: Many businesses need bulk gas supply regularly.
> Customer Loyalty Discounts: Give discounts to regular customers to build loyalty.
Good marketing helps you gain more customers and increase sales.
Cost Breakdown for Starting a Small-Scale LPG Business in Nigeria
1. LPG Retailing Business (Small Shop)
Items Estimated Cost (N)
• Business Registration 30,000
• Shop Rent (1 year) 250,000
• Gas Cylinders (50kg) 140,000
• Digital Scale (100/150kg) 100,000
• Gas hose & accessories 25,000
• Fire Extinguisher 20,000
2. Mini LPG Gas Plant (1.5 to 2.5 Tons)
Items Estimated Cost (N)
• LPG Storage Tank (1.5/2.5ton) 30,000
• Transportation/Installation 500,000
• Gas Pump & Dispenser 1,600,000
• Safety Equipments 300,000
• NUPRC Licensing & Permits 1M - 3M
• Land Acquisition 2M - 5M
Are you considering venturing into the LPG gas plant business or already running one? Don't let unexpected losses derail your success. GET YOUR COPY NOW!!!
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Profit Potential of Small-Scale LPG Business
The profit per kg of LPG varies between ₦100 – ₦300, depending on location and market demand.
Daily Sales Example (LPG Retailing)
> Selling 50kg of LPG daily at ₦150 profit per kg
> Daily Profit: ₦7,500
> Monthly Profit: ₦225,000
Daily Sales Example (Mini LPG Plant)
> Selling 500kg of LPG daily at ₦150 profit per kg
> Daily Profit: ₦75,000
> Monthly Profit: ₦2.25M
With steady customers, you can recover your initial investment within 6 to 12 months.
Are you considering venturing into the LPG gas plant business or already running one? Don't let unexpected losses derail your success. GET YOUR COPY NOW!!!
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