Feasibility Report On Haulage Business In The Downstream Sector Of The Nigerian Oil And Gas Industry.

Haulage in simple terms is the movement of goods from one location to another and transportation is the movement of goods or individuals from one location to another. Haulage is a very important component of trade and businesses as it is a pivotal section of offering goods and services in that it makes it available to the end user.
Haulage business is an interesting one which creates a lot of business opportunities let us first of all look at this in relation to the oil and gas industry. As stated earlier, that the haulage industry is part and parcel of the economic development of many economies both merging and developed economies.

A visit to the Ports in Lagos for example will be able to give us a better understanding in this regards. economic growth is due to the amount of imports and exports(trade) that is done by a nation and a critical examination is the numbers of containers that are delivered at the port for export and the number of containers that are also imported in a visit to the ports will reveal that at each port we have a minimum number of 500 trucks per day with reference to the tin can island port while some are dropping of their goods others are picking up when you examine this figure for 7 days in a week that’s an average of 3,500 trucks this is however, subject to traffic flow, congestion, no parking space and the poor state of our roads.

Next to the tin-can island port facility is also an oil terminal which is used as a receptive facility to receive refined oil for subsequent lifting and distribution to all parts of the country (over 900,000 square kilometers) due to the state of art loading gantry of such a facility over 400 trucks are loaded per day provided that there is constant availability of product meaning per week we have over 2,800 trucks and this is only one terminal.

In-addition to this, there are many truck parks in the ibafon area of Ogun State where many of these oil marketing companies have their truck parks due to congestion issues with trucks numbering in their tens of thousands coming to lift oil products for further distribution. A trip along the lagos-ibadan expressway will also reveal a lot of trucks just parked along the express roads just waiting to be loaded.

As it was stated earlier that our systems will never work right for some people to profit. Let us examine the scenario our four refineries in the nation as at today will not work up to maximal capacity all cause of it will create an advantage to some oil importers to profit and benefit. Nigeria as at today is financially capable to work and repair their refineries to work to full capacity so that it can meet both local demand and also produce enough products to export to other nations but trust me this is all but a tall dream!

For effective and quick distribution of oil products to be done the rail system will be the best option as seen in Russia, Europe are we trying to say that Nigeria is not able to develop her rail system so that this will be attainable it will also be far cheaper however, due to corruption and lack of professional expertise this will never work. Pipelines were created for distribution from the refineries to storage facilities in the regions so that the products can be trucked to all areas within the region. Even in the Nigerian scenario today most of the pipelines that are used to transport oil from the refineries to the storage facilities have even been corroded or vandalized so most times trucks load directly from refineries and transport products directly to their final destinations.

The importance of logistics/haulage cannot be over emphasized and this has resulted in a lot of investors going into the business both Nigerians and non Nigerians with all classes of the society being involved from the big names, working class, business class and many others.

The business opportunity in this sector in the downstream sector abounds and is one that is continually growing on a daily basis. it is estimated that as at now about 80million liters of petroleum products must be distributed to all parts of the nation the north, south west, east and south south daily to keep the nation running once this is not done the end result will be scarcity with a resultant effect that it will cripple the whole economy.

As at today the haulage sector in the downstream oil and gas sector in Nigerian has created a lot of ample opportunities in the aspect of job creation, wealth generation, source of income to government, an avenue to go into entrepreneurship it is also an investment with some little trainings that the technicalities can be understood. it is an investment that has the following qualities/characteristics:

• It is an investment that will always be there no matter what and for a very long time as it is accounts for 90% of the mode of transportation while pipelines accounts for10% as at today the rail method accounts for 0%.
• all types of refined oil products such as petrol, diesel, sludge, kerosene, fuel oils, cooking gas, base oils etc are all transported inter via trucks
• This sector is the live wire of the downstream oil and gas sector as without them nothing happens their strength is so obvious that when they decide to go on industrial action their impact is immediately felt by the whole nation.
• organizations such as PPMC and other oil majors also require the services of haulage/logistics companies to assist in freighting their products to customers
• Distribution of gasoil to power generating sets of banks, eateries, financial institutions, housing estates, manufacturing companies, advertising companies, telecoms cell sites, construction company sites, quarrying activities etc are all done by the use of trucks and no other means.
• Due to the growing populace of the country and the increasing demand for energy this in turn has resulted to an increase in logistics services so the market is one that is constantly growing and one that will definitely require new entrants into the game!

The return on investment on operating a haulage business ranges from 40% – 60% per month as this depends on the number of trips that you are able to make per week and subsequently per month this is based on making at least 2 trips per week and 8 in a month minimum.

It should also be noted that there are also peak seasons for demands of truck that is if you do hire services and not long term contractual hire services.

This report highlights the following:

• Introduction to the haulage industry in this sector
• How to go into the haulage business
• Where to go buy trucks and how to start up
• look at some of the bottle necks in this type of business
• How to become a player and also how to broker haulage transactions in Nigeria

This report will further show you how to be a player in this business opportunity and reap the financial gains from it and getting a possible livelihood from it.

Table of Contents

Table of Contents EXECUTIVE SUMMARY 1. Introduction • Business Opportunity 1.2 Country Background 2. Technical Analysis 2.1 The Project 2.2 Product Description • Product Location and Distribution • Legal Considerations 3. Opportunity 3.1 Market Overview 3.2 Demand and Supply 3.3 Customer Profile 3.4 Primary Competition 4. Socio- Economic and SWOT Analysis of the Project 4.1.1 Generation of Employment 4.1.2 Source of Government Revenue 4.1.3 Foreign Exchange Generation 4.2 SWOT Analysis 5. Risk Identification and Mitigation Strategy 5.2 Critical Success Factor 6. Financial Analysis

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