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How to Start and Run an LPG Gas Plant in Nigeria (2026 Guide)
If you get it right, LPG gas business still pays in Nigeria. People must cook every day. No light, no kerosene, no firewood - gas still sells.
But in 2026, it’s not the enter “enter and blow” again. Prices of equipment have gone up, supply is not stable like before, and government eyes are everywhere now.
Let me break it down in simple terms.
First: Is LPG Gas Business Still Worth It?
Yes - if:
1. You choose a good location
2. You don’t overbuild
3. You manage supply well
4. You avoid safety and DPR trouble
Gas is a volume business. You make money by selling plenty kg daily, not by overpricing.
LPG Gas Plant Sizes Nigerians Commonly Start With
> 1.5 Tons Skid :- This is entry level. good for small towns, new estates, or outskirts of cities. But may not be good if you have many competitors around you.
> 2.5 Tons Skid :- This is the most common size now. Mostly good for busy towns, areas with many tenants, or places with few strong competitors. This size balances cost and daily sales.
> 5 Tons Skid :- This one is not for beginners. It is mainly good for big cities, industrial areas or places with bulk buyers.
NOTE: If location is wrong, you’ll struggle.
Realistic Setup Cost in Nigeria (2026)
Let’s talk real market numbers, not Instagram figures.
> Prices depend on location, fabricator, and exchange rate. These are what people are actually seeing, not perfect-case numbers.
1.5 Tons Gas Plant
> Skid & tank: ₦2.5m (negotiable, depending on the seller)
> Construction & concrete: ₦3m (depending on the technician given the contract, and recent cost of material)
> Approvals & papers: ₦1.5m (reasonable budget, fire service approval could be cheap, but I can't say of DPR licence)
Total: ₦7m
2.5 Tons Gas Plant
> Skid & tank: ₦3.8m - ₦4.4m (Tokunbo - negotiable depending on the seller)
> Construction & setup: ₦6m (depending on the technician)
> Approvals: ₦2m – ₦3.5m
Total: ₦14m – ₦16m (rough estimate, depending on the equipment and materials used)
5 Tons Gas Plant
> Skid & tank: ₦11m – ₦15m (depending on the grade and seller)
> Construction: ₦10m (rough estimate)
Approvals: ₦3m – ₦5m (licencing and documentation, including CAC)
Total: ₦30m – ₦35m (rough estimate, depending on the equipment and materials used)
These figures assume no land cost. If you’re buying land, add that separately.
What Has Changed With Equipment Prices
Tanks cost more because steel is expensive. Inflation has effected the economy. Even as that, most of the equipments are shipped down to Nigeria. And sellers usually add landing cost, and other custom levy. This does not exclude pumps and meters - they now are more costly than usual. Not also to forget, safety items are no longer optional
In short: you can’t cut corners like before.
Gas Supply in Nigeria (Simple Truth)
Supply is where many people fail. Gas comes from:
1. Coastal depots
2. Major marketers
3. Middlemen (more expensive)
So, the problems this can cause in 2026 is, price changes weekly, and also trucks are delay. And let's not forget, scarcity mostly happens during high demand.
If you don’t plan supply well, you’ll lose customers.
How Gas Plant Owners Make Profit
Profit comes from margin per kg × daily volume.
normal profit range (2026)
> ₦70 – ₦150 per kg (after expenses)
Realistic Monthly Profit & ROI
Let’s be honest - no magic numbers. For an example, let's take a 1.5 tons plant.
> Daily sales: 50 – 70 kg
> ROI: 36 months – 3 years (depending on how sales go)
Same goes for 2.5 tons plant, or 5 tons plant. Daily sales will determine monthly net profits, and ROI. Location can double or cut these numbers.
How to Run the Business Well
1. Safety Is Not Optional
One fire issue can shut you down permanently.
2. Staff Must Be Trained
Untrained attendants cause losses and accidents.
3. Don’t Fight Price Wars
Sell fair, stay consistent, keep customers.
4. Keep Cash for Supply
Many plants die because they finish cash when gas price jumps.
5 Common Mistakes LPG Gas Plant Business Make
1. Starting too big
2. Ignoring approvals
3. Using cheap equipment
4. Poor supply planning
5. Bad staff supervision
My Advice!
LPG gas business in Nigeria is not scam, not easy money, but it still works. If you start small, choose location well, and respect safety, the business can feed you steadily for years.
No rush. No shortcuts.
Frequently Asked Questions (FAQs)
1. How much money do I need to start an LPG gas plant in Nigeria?
- It depends on the size. For a small 1.5 tons plant, you should be looking at ₦5m – ₦5.5m (excluding land). Bigger plants like 2.5 tons or 5 tons will cost more.
2. Is LPG gas business still profitable in Nigeria in 2026?
- Yes, it is still profitable. People cook every day. The key is good location, steady supply, and proper management. If these three are right, the business pays.
3. Which gas plant size is best for a beginner?
- For beginners, 1.5 tons or 2.5 tons is better. Starting too big without experience can put pressure on cash flow and supply.
4. How long does it take to recover my investment (ROI)?
- Most plants recover their money within 18 to 36 months, depending on size, daily sales, and how well the business is managed.
5. Do I need government approval before starting?
- Yes. You must get approval from NMDPRA, fire service, and other relevant agencies. Running without approval can lead to shutdown and heavy fines.
6. How do LPG gas plant owners make profit?
- Profit comes from selling volume, not overpricing. You earn from the difference between buying price and selling price per kg, multiplied by how much you sell daily.
7. Where do gas plants get their LPG supply from?
- Supply usually comes from Coastal depots, Major gas marketers, and Registered suppliers. Good supply connection is very important.
8. What are the biggest risks in LPG gas business?
- The major risks are fire incidents, poor gas supply, wrong location, price fluctuations, bad staff handling. Most of these can be controlled with good planning.
9. Can I run an LPG gas plant without experience?
- Yes, but it is risky. It is better to learn from an existing plant. Also, employing experienced staff will help you avert fire or safety danger. Remember to get proper guidance before starting. Experience saves money.
10. Is land purchase included in the setup cost?
- No. Most setup estimates do not include land. If you don’t already own land, you need to budget separately for it.