Up till now, i still haven't get why some Nigerians refer gas plant to gas station? Lol. I think the idea comes from we gotten to use with referring fuel stations, petrol stations and so and so name we do called it as the same with gas. I have come to understand that when people say the word "gas stations", they typically mean also the standard (big) gas plants - but not actually the mini gas plant or the complete setup skid. More like the Americans referring cooking gas to propane, and fuel, petrol to gas - lol.
So, this article is basically written with the view of setting up a standard cooking gas station (big gas plant). We will break down the costs in simple terms, so you can understand what to expect before starting.
It is true that starting a cooking gas (LPG) station in Nigeria is a profitable business because of the high demand for gas for domestic and commercial use. However, one of the biggest questions new investors ask is: “How much does it cost to build a standard cooking gas station in Nigeria?”
1. Land Acquisition
You need land in a good location, preferably close to residential or commercial areas with easy road access. Prices are higher in cities like Lagos, Abuja, and Port Harcourt compared to smaller towns. I can't say the price for you because that depends on a lot for factors including location proximity and the rest.
2. Regulatory Documents & Approvals
To operate legally, you need approvals from different agencies:
(Abeg, this is just an estimated....you actually need a professional person that deals with this to help you determine what and what, and also to help you with smooth process of acquiring the licensing and documentation.
> DPR/NMDPRA License: ₦500,000 – ₦2 million
> Fire Service Certificate: ₦100,000 – ₦300,000
> Environmental Impact Assessment (EIA): ₦500,000 – ₦1.5 million
> Town Planning Approval: ₦100,000 – ₦500,000
> Other Local Government Permits: ₦50,000 – ₦200,000
Total for Documents: ₦1.5 million – ₦4 million
3. Storage Tank Installation
A standard gas station requires at least a 10MT (metric tons) LPG storage tank with accessories like pumps, valves, and gauges. The bigger the tank, the higher the cost. The price can cost as much as ₦10 million – ₦25 million.
4. Plant Construction & Setup
This includes civil works such as:
> Foundation and fencing
> Administrative office
> Driveway and safety installations
Cement don cost, proberly going for ₦9,000 per 50kg bag. Including sand, and workmanship - cost can range from ₦1 million – ₦5 million
5. Equipment & Accessories
You will need:
> Dispensers and filling machines
> Compressors and pipelines
> Safety equipment (fire extinguishers, detectors, sand buckets)
Some equipments you can rather outsource yourself - nothing that difficult to find, but you must go with your negotiation skills. For the compressors, pumps and maybe pipelines, your technician can put together a cost range from ₦3 million – ₦8 million.
6. Working Capital
You also need money to buy your first stock of LPG and to cover operating expenses.
> Initial LPG Supply: ₦7 million – ₦12 million (depending on depot price)
> Staff Salaries, Fuel, Generator, Miscellaneous: ₦1 million – ₦2 million
Total Estimated Cost to Build a Standard Cooking Gas Station in Nigeria
• Small/Medium Scale: ₦25 million – ₦35 million
• Standard Scale: ₦40 million – ₦60 million
• Large Scale (prime cities): ₦70 million – ₦100 million+
Now, you can see. If someone is seeking the cost of building a cooking gas station, they are probably referring to the standard (big) gas plant - and that, depends on location, tank size, and the scale of your project. While the investment may seem high, LPG business is highly profitable with a steady demand across Nigeria.
If you plan properly, follow regulations, and choose a good location, you can recover your investment within 2–4 years.