If you are thinking of starting a CNG conversion centre in Nigeria, this guide will show you the real cost, requirements, and profit potential.
What is a CNG Conversion Centre?
A CNG conversion centre is a workshop where petrol or diesel cars are converted to run on Compressed Natural Gas. Technicians install CNG kits in vehicles, test them for safety, and provide after-sales support.
Cost of Establishing a CNG Conversion Centre in Nigeria
The total cost depends on location, equipment size, and certification. On average, you need between ₦20 million to ₦50 million to set up a standard CNG conversion centre.
Here’s the breakdown:
1. Workshop / Facility Setup
> Rent or build a workshop space
> Safety fittings (fire extinguishers, detectors, ventilation)
> Office space for customer reception
Estimated cost can go high as ₦5m – ₦10m
2. Equipment & Tools
> CNG conversion kits (for different vehicles)
> Gas compressors & storage tanks
Expect this to go for about ₦10m+ since most of these equipment are imported.
3. Licensing & Certification
Just budget ₦2m – ₦5m, anything related to CNG in Nigeria is expensive. Since it is in its early stages, some agency do take advantage of this, thinking only rich people who do this stuffs.
4. Marketing & Branding
> Online ads for awareness
Well, if you ask me - spending depends on your pocket and goals. This shouldn't be an overcalculation problem, just do what you can afford based on your goals.
How Profitable is a CNG Conversion Centre?
Most centres charge between ₦400,000 – ₦600,000 per vehicle for conversion, an that is for government funded one's. Private establishment charges as high as ₦1,000,000+.
If your centre converts just 10 cars monthly:
Let's say.....
> Revenue = ₦5m (average ₦500,000 per car)
> Expenses (kits, salaries, utilities) = ₦2m – ₦3m, you can sell this too at your workshop as repair replacement, even offering maintenance.
- Net profit = ₦2m monthly
In one year, you can make between ₦20m – ₦25m profit, depending on volume.
Challenges of Running a CNG Conversion Centre
1. High startup cost
2. Need for trained technicians
3. Limited awareness among car owners
4. Government regulations
If you invest now, you can position yourself as a market leader in this new energy business.