Diesel Supply And Distribution In Nigeria, The Feasibility Report

Nigeria being an oil producing nation however still relies on imported petroleum products for the servicing of the economy. Such petroleum products as Petrol (PMS), Diesel (AGO) and kerosene (DPK) are products utilized by almost everybody on daily basis at an average of 60 million litres daily usage. Due to increasing level of standard of living, more Nigerians are increasing the number of cars on the road, the need for constant power supply to aid uninterrupted production of goods and services and also for domestic use more Nigerians are increasing the demand for fuel in order to enjoy the usage of their generating sets and industrial plants.

This report highlights the financial viability or otherwise of establishing a Automated Gas Oil {AGO} supply and distribution company in Nigeria. The product would be sourced from tank farms/ depot and same would be supplied to local industries, telecommunication site, eateries, filling stations etc.

With a population of over one hundred and sixty five million { 165,000,000} people ,growing at the average rate of 2.7% per annum and an economic growth rate of about 5.7 % in the past five years, the market for refined petroleum products in Nigeria, established ,growing and sustainable.

The company would start operations with two {2} 20, 0000 litres delivery trucks, each making three deliveries in a week.

With the current situation in Nigeria of currently N167 Million people, the use of refined products coupled with what is happening in the rural-urban drift and current support of afforestation, the use of refined petroleum products such as gasoil (diesel) and kerosene (dual purpose kerosene) for use of energy has dramatically increased.

As at today the consumption rate in Nigeria for refined petroleum products is as follows:-

i.    Petrol (Premium Motor Spirit)    – 40, 000, 000 ltrs
ii.    Diesel (Automotive Gas Oil)     – 25, 000, 000-30,000,000 ltrs
iii.    Kerosene (Dual Purpose Kerosene) – 20,000,000 ltrs

The growth and development of any community/nation/country is dependent on power. Self development sustenance and empowerment are all determined by power. A nation can only develop with power. However, the case is different in Nigeria as power is either epileptic or non-existent. This is what has caused many industries (which include: small, medium and large scale) to migrate to neighboring countries where they would be able to thrive well.

Hence the only solution is for companies to create their own source of energy production in order to keep in business. A lot of individuals have capitalized in this area and made so much money in this regards, making a good livelihood and Sustenance area for themselves

The return on investment on the trading of refined petroleum products ranges from 20% – 30% per transaction.

Table of Contents

EXECUTIVE SUMMARY Business Overview 1.1 Description of the Business 1.2 Vision and Mission Statement 1.3 Business Objective 1.4 Value Proposition 1.5 Critical Success Factor of the Business 1.6 Current Status of Business 1.7 Description of the Business Industry 1.8 Contribution to Local and National Economy Marketing Plan 2.1 Description of product 2.2 Product Packaging and delivery 2.3 The Opportunity 2.4 Pricing Strategy 2.5 Target Market 2.6 Distribution and Delivery Strategy 2.7 Promotional Strategy 2.8 Competition Production Plan 3.1 Description of the Location 3.2 Raw Materials 3.3 Production Equipment 3.4 Production Process 3.5 Production Cost 3.6 Stock Control Process 3.7 Pre-Operating activities and expenses 3.7.1 Operating Activities and Expenses 3.8 Milestones Organizational and Management Plan 4.1 Ownership of the business 4.2 Profile of the promoters 4.3 Key Management Staff 4.3.2 Management Support Units 4.4 Details of salary schedule Financial Plan 5.1 Financial Assumption 5.2 Start up Capital Estimation 5.3 Source of Capital 5.4 Security of Loan 5.5 Loan Repayment Plan 5.6 Profit and Loss Analysis 5.7 Cashflow Analysis 5.8 Viability Analysis Business Risk and mitigation factor 6.1 Business Risks 6.2 SWOT Analysis

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