Diesel is a critical fuel source for various industries and businesses in Nigeria and Africa. Diesel supply business involves the distribution and sales of diesel to organizations, industries, and households. Nigeria, being the largest oil producer in Africa, has a significant demand for diesel supply business, which has contributed significantly to the country’s economy. According to a report by the National Bureau of Statistics, the petroleum products importation statistics for the fourth quarter of 2020 shows that Nigeria imported 5.61 billion liters of diesel, indicating a 14.33% increase from Q3 2020.
The diesel supply business has become a lucrative venture in Africa, as it has a growing demand due to the increase in industrialization and urbanization. The global diesel market is also experiencing significant growth, and it is projected to reach $389.6 billion by 2027, with Africa expected to contribute significantly to the growth. The increasing need for diesel has opened up opportunities for diesel supply business owners to explore the export market, especially in neighboring African countries.
Nigeria, being the largest economy in Africa, has an advantage in the diesel supply business as it has the infrastructure, resources, and skilled labor required for the production, distribution, and sales of diesel. The government has also put in place policies and regulations to encourage local production and reduce importation. These factors make Nigeria a potential hub for diesel supply business in Africa.
The oil and gas industry is one of the most profitable sectors in the world. In Nigeria, it accounts for the holy grail of the country’s economic output, making it extremely important in aiding economic development in the nation. While this industry remains a great source of revenue for the country, a few individuals are taking advantage of it to create fascinating businesses. They’re operating in both crowded and less crowded niches, and are generating amazing revenues ranging from a few thousands of dollars to millions of dollars.
Whether you have a lot of capital or not to venture into the oil and gas industry, there’s always a niche you can play a role in, and one of them is the diesel supply business in Nigeria.
See Also: 35+ Lucrative Oil & Gas Business Ideas And Opportunities in Nigeria And Africa
What Is Diesel?
Diesel is a fuel that is commonly used in diesel engines. Its scientific name is diesel fuel, and it is a type of fuel made from crude oil. It is known for its high energy density and is commonly used as fuel for trucks, buses, and other heavy-duty vehicles. In Nigeria and Africa, diesel is a crucial source of energy for industries, businesses, and households, making the diesel supply business an essential industry in the region.
See Also: How To Start A Lucrative Professional Cleaning Business In Nigeria and Africa: The Complete Guide
What Is The Diesel Supply Business In Nigeria About?
Diesel Supply Business refers to the commercial distribution of diesel fuel, a petroleum-derived liquid used as a fuel for engines, generators, and heating systems. Diesel fuel is composed primarily of hydrocarbons, and it is obtained from the fractional distillation of crude oil. The scientific name for diesel fuel is “petrodiesel” or “fossil diesel.”
In Nigeria and Africa, diesel fuel is a crucial source of energy for various industrial and commercial activities, including transportation, power generation, and agriculture. The demand for diesel fuel in the region is significant due to the widespread use of diesel-powered machinery and the limited availability of alternative energy sources.
Diesel Supply Business requires a reliable supply chain and logistics infrastructure to ensure timely delivery of fuel to customers. The profitability of the business is influenced by factors such as fluctuating fuel prices, competition, and government regulations.
Research studies have been conducted to optimize diesel fuel production and reduce harmful emissions from diesel-powered engines. Some examples of such studies include the development of bio-diesel, a renewable fuel derived from vegetable oils and animal fats, and the implementation of emission control technologies in diesel engines.
Overall, Diesel Supply Business in Nigeria and Africa presents a viable opportunity for entrepreneurs and investors looking to tap into the growing demand for energy in the region.
he diesel supply business involves the supply of diesel—widely known as Automated Gas Oil (AGO)—to organizations who require a steady supply. Some organizations who need diesel to be constantly supplied to them are hospitals, manufacturing companies, small private organizations, tank farms, and more.
See Also: How To Find Real AGO Sellers And Buyers In Nigeria
Benefits of The Diesel Supply Business In Nigeria and Africa
- Reliable Source of Energy: Diesel is one of the most reliable sources of energy in Nigeria and Africa. It is widely used to power generators, machinery and vehicles, making it an important commodity in the region.
- Job Creation: Diesel supply business has the potential to create job opportunities in the region. From truck drivers to mechanics and administrative staff, the diesel supply chain requires a wide range of skills and expertise.
- Economic Growth: The diesel supply business can contribute significantly to the economic growth of Nigeria and Africa. It is an important component of the energy sector and supports other sectors of the economy.
- Energy Security: Diesel supply business ensures energy security by providing reliable and consistent energy supply to businesses and households in Nigeria and Africa.
- Government Revenue: The diesel supply business contributes to government revenue through taxes and other levies.
- Rural Electrification: Diesel generators provide a reliable source of electricity for rural communities that are not connected to the national grid.
- Healthcare: Diesel generators are essential in providing reliable electricity supply to healthcare facilities, ensuring that critical medical equipment is always functional.
- Education: Reliable electricity supply is crucial in providing quality education in Nigeria and Africa. Diesel generators provide a reliable source of electricity to schools and universities.
- Agriculture: Diesel-powered machinery is used in agriculture for activities such as plowing, harvesting, and irrigation.
- Construction: Diesel generators and machinery are used extensively in the construction industry, making it an important market for diesel suppliers.
- Mining: The mining industry in Nigeria and Africa relies heavily on diesel-powered machinery and generators.
- Transport: Diesel is widely used as a fuel for transport in Nigeria and Africa, making it an essential commodity for the transport sector.
- Industrialization: Diesel supply is an important component of industrialization in Nigeria and Africa, as it supports the growth of various industries.
- Export Opportunity: Nigeria has the potential to become a major exporter of diesel in the region due to its abundant oil reserves and growing diesel supply industry.
- Reduction of Carbon Emissions: Diesel engines are becoming more efficient and cleaner, resulting in reduced carbon emissions and improved air quality in Nigeria and Africa.
See Also: How To Start A Lucrative Oil And Gas Company In Nigeria and Africa: The Complete Guide
Business Opportunities In The Diesel Supply Business In Nigeria and Africa
- Fuel Supply: Diesel is widely used as fuel for generators, trucks, and other industrial machinery, creating opportunities for diesel supply businesses to meet the demand for fuel in various industries.
- Transportation: The transportation of diesel from refineries to end-users provides a business opportunity for companies that specialize in diesel transportation.
- Storage: The storage of diesel fuel in bulk quantities requires specialized tanks and infrastructure, creating a business opportunity for companies that offer storage solutions.
- Retail Distribution: Retail distribution of diesel fuel to petrol stations, mining sites, and other industrial locations is another potential business opportunity for diesel supply companies.
- Export: Nigeria is a major exporter of crude oil and diesel, creating opportunities for companies that specialize in the export of diesel to other African countries or beyond.
- Import: In contrast, diesel is imported into Nigeria to meet domestic demand, providing opportunities for businesses that specialize in diesel importation.
- Biodiesel Production: Biodiesel is a renewable diesel fuel made from vegetable oil, providing opportunities for companies that produce biodiesel.
- Sales and Marketing: Sales and marketing of diesel fuel to end-users, such as transport companies and mining sites, is a business opportunity for diesel supply companies.
- Maintenance and Repair: The maintenance and repair of diesel engines and equipment is an essential service for the transportation and industrial sectors, creating opportunities for companies that specialize in diesel engine maintenance and repair.
- Training and Education: Diesel engine operators require specialized training and education, creating opportunities for companies that offer training and education services.
- Renewable Energy: The growth of renewable energy sources, such as solar and wind power, is creating opportunities for companies that specialize in the integration of diesel generators with renewable energy systems.
- Waste Management: The proper disposal of used diesel fuel and other hazardous waste materials from diesel operations is a business opportunity for companies that specialize in waste management.
- Technology Solutions: The use of technology solutions, such as fuel monitoring and management systems, provides opportunities for companies that offer these solutions to diesel supply businesses.
- Financing: Financing of diesel supply operations, such as the purchase of fuel storage tanks and transportation vehicles, is a business opportunity for financial institutions.
- Consultancy: Consultancy services, such as market research and analysis, feasibility studies, and project management, provide opportunities for companies that offer consultancy services to diesel supply businesses.
See Also: How To Start A Lucrative Equipment Leasing Business In Nigeria and Africa: The Complete Guide
Facts About The Diesel Supply Business In Nigeria and Africa
- Nigeria is the largest producer of crude oil in Africa, making the Diesel Supply Business a lucrative opportunity for entrepreneurs.
- Diesel is the most commonly used fuel for powering generators in Nigeria due to frequent power outages.
- Diesel prices in Nigeria are regulated by the government, which creates opportunities for companies that can provide more affordable prices.
- The Diesel Supply Business in Nigeria is a highly competitive market with many players.
- The transportation and logistics sector is closely tied to the Diesel Supply Business in Nigeria and Africa.
- Nigeria has a high demand for diesel fuel, with an estimated 70% of the country’s energy needs being met by diesel generators.
- Africa as a whole is projected to see a significant increase in demand for diesel fuel due to economic growth and urbanization.
- The Diesel Supply Business in Nigeria and Africa is heavily influenced by global oil prices.
- Nigeria’s dependence on diesel for power generation has led to concerns about air pollution and environmental damage.
- The government of Nigeria has announced plans to gradually transition to more renewable energy sources, which could impact the future of the Diesel Supply Business.
- The Diesel Supply Business in Nigeria and Africa presents opportunities for partnerships and collaborations between local and international companies.
- Adequate storage facilities and transportation infrastructure are essential for success in the Diesel Supply Business in Nigeria and Africa.
- The process of importing diesel fuel into Nigeria can be complicated and requires adherence to government regulations.
- The Diesel Supply Business in Nigeria and Africa can be influenced by political instability and security concerns in some regions.
- The use of counterfeit and adulterated diesel fuel is a significant challenge for the Diesel Supply Business in Nigeria and Africa.
- The use of diesel generators in Nigeria has been linked to noise pollution and negative health effects.
- The Diesel Supply Business in Nigeria and Africa requires a significant investment in capital and resources.
- The volatility of global oil prices can make it difficult for companies in the Diesel Supply Business to maintain stable profits.
- The Diesel Supply Business in Nigeria and Africa can create job opportunities for local communities, particularly in the transportation and logistics sectors.
- The quality of diesel fuel can vary significantly, which creates opportunities for companies that can provide higher-quality fuel.
- The Diesel Supply Business in Nigeria and Africa is influenced by government policies, such as taxes and subsidies.
- The rise of electric vehicles and other alternative energy sources may impact the demand for diesel fuel in the future.
- The Diesel Supply Business in Nigeria and Africa can be impacted by natural disasters, such as hurricanes and flooding.
- Adequate knowledge of the local market and regulations is critical for success in the Diesel Supply Business in Nigeria and Africa.
- The Diesel Supply Business in Nigeria and Africa requires a strong focus on safety and environmental responsibility.
See Also: How To Start A Lucrative Mining Company In Nigeria and Africa: A Complete Guide
Types Of Diesel In Nigeria and Africa
Diesel fuel is a type of fuel derived from crude oil and is commonly used in diesel engines as a source of power. There are different types of diesel fuel that are used for diesel supplies in Nigeria and Africa, including:
- Low-sulfur diesel (LSD): This is a type of diesel fuel with a sulfur content of less than 500 parts per million (ppm) and is commonly used in on-road vehicles.
- Ultra-low-sulfur diesel (ULSD): This is a type of diesel fuel with a sulfur content of less than 15 ppm and is commonly used in off-road vehicles, such as construction equipment and generators.
- Biodiesel: This is a type of diesel fuel made from vegetable oils or animal fats and can be used in diesel engines without modification.
- Synthetic diesel: This is a type of diesel fuel made from natural gas or coal, and has lower emissions than conventional diesel fuel.
- Marine diesel: This is a type of diesel fuel used in marine engines and is often treated with additives to improve its performance and reduce emissions.
The type of diesel fuel used for diesel supplies in Nigeria and Africa depends on the specific application and the regulations governing diesel fuel in that region.
See Also: How To Start A Lucrative Low Pour Fuel Oil (LPFO) Supply Business In Nigeria and Africa: The Complete Guide
The Peak Season For Diesel Supply Business In Nigeria and Africa
The demand for diesel in Nigeria and Africa experiences a peak during certain periods of the year. One of the primary drivers of peak demand is the agricultural season, as diesel is used to power tractors, harvesters, and other farm machinery. The planting season typically begins around April, with the harvesting season occurring later in the year. This results in increased demand for diesel during these periods.
Another significant factor that affects peak demand is the transportation sector. Diesel is widely used to power commercial vehicles such as trucks, buses, and generators. The demand for these vehicles increases during the festive periods when there is a high volume of movement and commercial activities. For instance, in Nigeria, the festive period from December to January sees an upsurge in transportation and logistics activities, leading to an increase in diesel demand.
Additionally, the demand for diesel also rises during periods of power shortages or outages. Many businesses and individuals rely on diesel generators as backup power sources, especially in areas where access to electricity is limited. This increases the demand for diesel during such periods.
Overall, the peak demand periods for diesel in Nigeria and Africa are influenced by various factors, including the agricultural season, transportation, and power shortages. It is essential for diesel suppliers to be aware of these periods to ensure they can meet the increased demand.
See Also: How To Start A Lucrative Consulting Business In Nigeria and Africa: The Complete Guide
Types Of Equipment Used For The Diesel Supply Business In Nigeria or Africa
Equipment plays a vital role in the processing, packaging, and supply of diesel in Nigeria and Africa. Some of the essential equipment used in diesel supply business are:
- Storage tanks: They are used to store diesel in large quantities before packaging and supply.
- Dispensing pumps: They are used to dispense diesel into smaller containers for packaging and supply.
- Delivery trucks: They are used for transporting diesel to various locations for supply.
- Filtration systems: They are used to filter out impurities and contaminants from diesel before packaging and supply.
- Packaging machines: They are used to pack diesel into smaller containers such as jerry cans, drums, and bottles.
- Filling machines: They are used to fill diesel into containers accurately.
- Labeling machines: They are used to label containers with relevant information such as product name, volume, and manufacturing date.
- Safety equipment: These include personal protective equipment such as gloves, safety glasses, and respiratory protection to protect workers from hazards.
- Testing equipment: These include equipment for testing diesel quality, such as density meters, flash point testers, and water content analyzers.
Proper maintenance of equipment is crucial to ensure safe and efficient operations in the diesel supply business.
How Does The Diesel Supply Business In Nigeria Work?
There are two ways the diesel supply business in Nigeria works:
1). Diesel Supplies To Tank Farms:
Tank farms usually need a regular supply of diesel or AGO (Automated Gas Oil). Depending on what they’re storing, they could also need a constant supply of DPK, and PMS.
The supplies to tank farms happens with a vessel. Since there are people who import diesel to Nigeria with their vessels, they regularly initiate the services of procurement officers, seller mandates, and brokers to help them identify tank farms who need diesel supplies, so they can either supplement their diesel supply or sign a long term contract with the tank farm to regularly supply them diesel every month for usually a period of one year or more.
The profit margins that businesses who supply to tank farms usually make from their supplies are usually about 5 to 10 Naira per liter, and the tank farms make a profit of that range too. While it may seem little, tank farm supplies usually run into millions of liters, and 5 million liters at a profit margin of 5 Naira is about 25 million Naira.
2). Diesel Supplies To Organisations:
Most organizations like private and government hospitals, manufacturing companies, and more, usually need a constant supply of diesel in Nigeria to run their operations. They mostly can’t pay upfront, and so, get organisations who are into the supply of diesel or AGO to register as one of their regular diesel suppliers.
People who supply to them purchase the diesel from the depots, mark up their profits at about 10% to 25% of the market value, and use petrol tankers to supply them to their clients.
Businesses who operate on this level could tend to make more money than those who supply to tank farms, only if they have a very wide client list collectively ordering hundreds of thousands or millions of litres of diesel monthly.
See Also: We’re The Top, Most Reliable, And Affordable Diesel Suppliers In Lagos, Nigeria
How Can You Start A Diesel Supply Business In Nigeria Even If You Have No Money?
The larger players who have a lot of money to venture into the diesel supply business in Nigeria easily make millions or billions of Naira monthly. But when you have no money to start a diesel supply business in Nigeria, becoming a broker is the best route to go.
Who’s A Diesel Broker?
A diesel broker is someone who sources organizations and businesses in need of diesel supplies at an affordable price and links them up with diesel suppliers who can deliver.
Usually when they do this, they tend to add their own mark-ups on the price with the company handling the supply, such that if they have an order for 100,000 litres of diesel to be supplied, they could get a quote from the diesel supplier, mark up the amount per litre by 2 Naira, and execute the contract, thereby making 200,000 Naira for themselves.
If they get a tank farm supply of say 10,000 Metric tons, which is about 11,299,435 liters, a profit margin of 1 Naira on every liter will make the broker 11,299,435 Naira profit. Depending on the tank farm purchasing, you may have a markup of 1 to 3 Naira. Including the fact that tank farms usually order anywhere from 10,000 Metric Tons of diesel to 50,000 Metric Tons of diesel, to a whole lot more.
The best part of the diesel supply business is that diesel brokers don’t have to own an office. All you need is to be able to build valuable links between both the buyers and the sellers, and follow up on every supply.
See Also: The Ultimate Guide To Starting A Crude Oil Brokerage Business (Crude Oil Selling) In Nigeria And Africa
How Can You Know Which Organizations Are Looking For Diesel Suppliers In Nigeria?
The easiest way to find organizations that have an immediate supply need is to pay them a visit and advertise your service. When you’re present, submit your company profile and ask to know if you can speak with their procurement officer.
The procurement officers are the individuals whose job it is to find diesel suppliers in Nigeria that can fulfill their pressing needs. When you’re in contact with a lot of procurement officers and have made it known that your organization can meet their diesel supply needs whenever it comes up, they’d tend to reach out to you sometimes concerning a pressing supply need they may have.
Other times, these organizations could put up an advertisement on LinkedIn, announcing their need for supplementary diesel supplies. As a diesel broker, you should always be on the lookout for such announcements on LinkedIn.
See Also: How To Find International Buyers For Your Import/Export Business
How Can You Find Diesel Suppliers In Nigeria That You Can Successfully Broker Through?
This is one method to easily come in contact with organizations that can handle any diesel supply request that you may have. You could have a friend introduce you to a diesel supply company or you could walk into some offices to advertise your brokerage service, so you can know if they welcome the use of brokers or not for their businesses.
This is one of the most effective ways to find businesses to broker your diesel supply business in Nigeria through. You could connect with key people who work with petroleum companies in Nigeria via LinkedIn, and after they accept your connection request, make them know about your brokerage service.
They’d tell you whether it is possible or not, and will let you know their terms and conditions.
See Also: How To Buy Crude Oil From Nigeria: Complete Guide For Buyers And Sellers
Does Having Diesel Suppliers And Diesel Buyers Mean That Anyone Can Venture Into The Diesel Supply Business In Nigeria?
The ability to build a strong supply chain network is critical to the success of any business. Anyone with the talent wins. The more deals he or she is able to close, the more money they’d make.
Finding diesel suppliers in Nigeria to cover your needs is usually never the problem. The real problem always lies in finding diesel buyers in Nigeria.
When you have a fail-proof and highly effective system to get a lot of diesel buyers like organisations and tank farms to reach out to you for a constant supply of diesel, you could make far more money—based on how many supplies you get in a month—as a diesel broker, than even people who own the products.
So if you have the means to get as many diesel buyers as possible to patronize your service, you’re already in business.
See Also: 14 Things That Kill Crude Oil Marketing Transactions In Nigeria
Is There An International Standard Fee For Diesel Or AGO Brokers In The Diesel Supply Business In Nigeria?
Asides a broker who first gets a quote from the diesel supplier before laying out a final price to the diesel buyer, there’s a standard way the facilitators’ commissions are calculated. This standard method is based on tank farm deliveries from vessels and is widely used in many countries around the world.
For instance, if the seller plans to supply diesel to a tank farm for xxx Naira per liter when facilitators are involved, the amount would be an additional 2 Naira. The 2 Naira now, would be shared between the brokers on both the buyer’s and seller’s side.
So if there was only one broker on the seller’s side, the broker gets a full 1 Naira per liter. If there are two brokers on the seller’s side, they each get 50 Kobo per liter. The same applies to the brokers on the diesel buyer’s side.
If the commissions to be shared by the brokers on the diesel buyer’s side and the diesel seller’s side is 1 Naira instead, the amount would be plus 1 Naira. Meaning both sides share 50 Kobo each, while the real cost of the diesel is minus 1 Naira.
But while this is the international standard method, a diesel broker could still go out of their way to get a quote from the diesel supplier at a price, and markup with an extra 5 Naira, making it a full 5 Naira per litre as a profit.
So if a diesel broker gets a diesel supply order from a tank farm for 10,000 metric tonnes, which is about 11,299,435 liters, at a full 5 Naira per liter profit margin, the broker could make 56,497,175 Naira as a profit from the transaction.
The great news is that tank farms mostly only order a minimum of 5,000 Metric Tonnes. They could order 50,000 Metric Tonnes or even as high as 100,000 Metric Tonnes, making any facilitator in the middle of the transaction to be able to make a large amount of money from successfully closing the deal, based on the maximum amount the diesel buyer or tank farm is willing to pay per litre, or based on the international brokerage method and how many brokers are involved in the transaction.
How Do You Protect Your Interests In A Diesel Supply Transaction
If you’re handling a tank farm supply, you’d have the diesel seller and the diesel buyer to sign a SPA (Sales and Purchasing Agreement). In this agreement, the banking coordinates of all the brokers, facilitators, and mandates involved in the transaction would be present. So that when the diesel buyer pays for the AGO supplied, they’d have to pay all the parties involved in the agreement.
Now, if you added a personal commission for yourself before submitting the final quote to the diesel buyer, you’d need to have two separate agreements with the diesel supplier, called a Non-Circumvention/Non-Disclosure Agreement (NCNDA) and a Master Fee Protection Agreement (MFPA).
The NCNDA and MFPA will protect you from any form of circumvention by the diesel buyer and diesel seller. If for instance after the first supply, the diesel supplier decides to circumvent you and go straight to the diesel buyer to sign a one-year diesel supply contract, this agreement will ensure you continue to get paid your commissions no matter what.
Any breach of these agreements would give you the power to initiate legal proceedings. And since the proceedings could run into hundreds of thousands of dollars, it is always important that it should be included in the agreements that any breach by the diesel seller would mean the seller must cover the legal cost also.
See Also: How To Find Real Crude Oil Sellers And Buyers In Nigeria
So How Do You Start A Diesel Supply Business In Nigeria?
Step One: Find A Diesel Supplier
Getting a diesel supplier in Lagos, for instance, is the first step to starting your diesel supply business. Although sometimes, you could as well start searching for diesel buyers before you reach out to diesel suppliers, having a handful of suppliers you can always get quotes from for every supply is the best way to start.
Step Two: Find A Diesel Buyer
As stated earlier, the diesel buyer is the most important element in the diesel supply business in Nigeria, else, even if you have 100 diesel suppliers, you won’t make any money.
To find a diesel buyer like an organization or a tank farm, you could either advertise your business services by visiting their offices to submit your company profile or by connecting with them on LinkedIn.
Step Three: Broker A Deal
Having found a diesel supplier and a diesel buyer in need of AGO, you could go ahead to broker the transaction. If it is a tank farm supply, you would use the international standard method of handling broker remunerations or you could top up the quote you get from the supplier with a standard fee of maybe 2 to 3 Naira extra, making you more money per liter. If it is not a tank farm supply, but rather a tanker supply to an organization, you could top the diesel supplier’s quote with your commission before submitting the final quote.
How To Sell or Market Diesel In Nigeria or Africa
- Create a strong online presence: Utilize social media platforms and websites to showcase your diesel products and services to potential customers.
- Attend trade shows and conferences: Participate in relevant events to network and promote your diesel business.
- Offer referral programs: Encourage your satisfied customers to refer new customers to your business by offering incentives such as discounts.
- Create targeted advertising: Use online advertising platforms to target specific demographics or geographic areas.
- Provide exceptional customer service: Build a positive reputation by providing excellent customer service and responding quickly to customer inquiries.
- Establish partnerships with other businesses: Partner with complementary businesses to expand your reach and offer bundled services.
- Offer financing options: Provide financing options to customers to increase the affordability of your diesel products and services.
- Leverage word-of-mouth marketing: Encourage satisfied customers to share their positive experiences with others.
- Sponsor community events: Sponsor local events to increase brand awareness and demonstrate your commitment to the community.
- Use search engine optimization (SEO): Optimize your website for search engines to increase your visibility online.
- Offer loyalty programs: Reward loyal customers with incentives to keep them coming back.
- Create informative content: Develop educational content that showcases your expertise and provides value to potential customers.
- Utilize email marketing: Use email marketing to keep customers informed about new products and services.
- Offer special promotions: Create limited-time promotions or discounts to encourage customers to make a purchase.
- Use targeted direct mail: Use direct mail campaigns to reach potential customers in specific geographic areas.
- Utilize video marketing: Create engaging video content that showcases your diesel products and services.
- Host events or webinars: Host events or webinars to educate potential customers about your diesel business.
- Utilize influencer marketing: Partner with social media influencers to reach a wider audience.
- Provide exceptional after-sales service: Follow up with customers after their purchase to ensure satisfaction and build long-term relationships.
- Create a loyalty program: Reward loyal customers with incentives to keep them coming back.
- Utilize mobile marketing: Use SMS or mobile apps to reach potential customers on their mobile devices.
- Use customer testimonials: Showcase positive customer testimonials to build trust with potential customers.
- Participate in online forums and communities: Participate in online communities to build relationships and promote your diesel business.
- Utilize traditional advertising: Place ads in relevant print media or on billboards to reach potential customers.
- Use geo-targeted advertising: Use location-based advertising to target potential customers in specific geographic areas.
Challenges Of The Diesel Supply Business In Nigeria and Africa
- Fluctuating prices of crude oil and diesel: The price of crude oil and diesel can vary significantly, making it challenging to maintain consistent pricing for the business.
- Inadequate Storage Facilities: A major challenge faced by diesel suppliers is the lack of adequate storage facilities, which can lead to damage or contamination of the diesel.
- Competition from Established Suppliers: The diesel supply business in Nigeria and Africa is highly competitive, with many established suppliers already dominating the market.
- Transportation Challenges: Transporting diesel to remote or hard-to-reach areas can be challenging due to poor road infrastructure, leading to delays and additional costs.
- Inadequate Government Support: The government’s policies and regulations on the diesel supply business in Nigeria and Africa are often inadequate and can be a major hindrance to business growth.
- Poor Quality Diesel: The quality of diesel supplied in Nigeria and Africa is often poor, leading to engine problems and loss of customers.
- Payment Delays: Payment delays from clients can lead to cash flow problems and hinder the growth of the diesel supply business.
- Lack of Skilled Workforce: Finding skilled workers with experience in the diesel supply business can be difficult, which can affect the quality of service provided.
- Inconsistent Power Supply: Inconsistent power supply in Nigeria and Africa can make it difficult to run a diesel supply business, as it requires electricity to power machinery.
- High Taxes and Tariffs: The high taxes and tariffs on imported equipment and diesel can make it difficult for small businesses to enter the market.
- Lack of Access to Funding: The lack of access to funding from financial institutions can hinder the growth of diesel supply businesses in Nigeria and Africa.
- Counterfeit Products: The diesel supply business in Nigeria and Africa is plagued by counterfeit products, which can damage the reputation of businesses.
- Price Instability: The unstable prices of diesel in Nigeria and Africa can lead to a reduction in profit margins and make it challenging to predict future costs.
- Environmental Regulations: The strict environmental regulations can be challenging to comply with, leading to additional costs for diesel suppliers.
- Currency Fluctuations: The frequent fluctuations in currency exchange rates can affect the profitability of diesel supply businesses that rely on imports.
- Bureaucracy: The bureaucratic procedures involved in obtaining licenses and permits for diesel supply businesses in Nigeria and Africa can be time-consuming and expensive.
- Security Challenges: The security challenges in Nigeria and Africa can affect the transportation and delivery of diesel, leading to delays and additional costs.
- Lack of Access to Information: The lack of access to information on market trends and pricing can make it difficult for diesel supply businesses to make informed decisions.
- Dependence on Foreign Suppliers: Dependence on foreign suppliers for equipment and diesel can be challenging due to currency fluctuations and import restrictions.
- Inefficient Supply Chain: Inefficient supply chain management can lead to delays, increased costs, and loss of customers.
- Limited Market Size: The market for diesel supply business in Nigeria and Africa is limited, which can make it challenging to achieve significant growth.
- Limited Access to Technology: Limited access to technology and innovation can hinder the growth and competitiveness of diesel supply businesses.
- Language Barrier: The language barrier can be a challenge when dealing with clients from different regions, leading to miscommunication and loss of business.
- Lack of Trust: The lack of trust in the diesel supply business in Nigeria and Africa due to previous negative experiences with suppliers can be a significant challenge.
- Lack of Proper Training: The lack of proper training and certification can lead to safety concerns and loss of business for diesel suppliers.
What Next After Diesel Brokerage?
While first starting a diesel supply business in Nigeria through diesel brokerage can be a great way to start, over time you’d need to acquire tankers and more to enable you to fulfill most of the orders yourself, so you can make a considerably larger profit than if you were just brokering transactions.
What are your thoughts on how to start a diesel supply business in Nigeria? Let me know by leaving a comment below.
An Important Point
Finding genuine diesel suppliers in Lagos or Nigeria that can deliver is usually a problem. Most times a lot of diesel suppliers in Lagos, Nigeria fill in the clients with promises of delivery but never meet up, either because of the lack of finance or their inability to successfully broker a diesel supply deal.
Startup Tips Daily Media, through her sister company, Globexia, supplies diesel (AGO), PMS, and DPK to organisations and tank farms. We can do tank farm deliveries from 10,000 Metric Tonnes to well over 50,000 Metric Tonnes of diesel (AGO).
If you need diesel suppliers in Lagos, Nigeria for a monthly tank farm delivery, we’ve got you covered. If you need diesel suppliers in Lagos, Nigeria for regular diesel tanker supplies to private and public organisations, we can fully cover your needs.
Whether you’re in any part of Nigeria like Calabar, Port Harcourt, Kaduna, Lagos, or are in the West African coast in countries like Ghana, Cameroon, Benin Republic, and more, and need diesel suppliers to cover your diesel (AGO) needs, Startup Tips Daily Media, through her sister company can cover all your diesel supplies (AGO Supplies).
If you’re a genuine tank farm or a diesel (AGO) importer, for instance, and need a buyer or seller mandate to represent you in your diesel product purchases and supplies in Lagos, Nigeria or anywhere else, including countries in West Africa, we’d be more than happy to serve your interests well.
In addition to our diesel supply business in Nigeria, we’re also crude oil facilitators, can help you execute a successful crude oil purchase from Nigeria, and can also represent your interests as your crude oil buyer mandate or crude oil seller mandate.
If you’re only a scam, don’t waste your time, as the conversation wouldn’t last too long after a few questions and demands to prove your authenticity have been made from our end.
Professional Due Diligence Checks In Nigeria By Globexia
International buyers are always wary of doing business with Nigerian based businesses because of the high risk of disappointments either in the form of time wasted or money lost, and as such, are highly sensitive of any organisation that presents them a trade offer.
To curb this problem and help international buyers make comfortable and confident trade decisions, Startup Tips Daily, through her sister company, Globexia, has set up an in-depth due diligence check consulting service that will help international buyers get in-depth information on any organisation looking to do business with them. Some of the information the international buyers stand to gain from the in-depth due diligence exercise that will be carried out by Globexia’s team of experienced lawyers in Nigeria are:
- Verification of Company Registration
- Verification of Export Licence
- Verification of Export Activity
- Verification of Past Certificates of Origin
- Verification of Past & Present Bill of Ladings
- Verification of International Passport / Driver’s Licence of The Exporter
- Verification of Bank Verification Number (BVN)
- Verification of Tax Documents
- Verification of Financial Health of The Company
- Verification of Mining Licence
- Physical Verification of Office Address With Pictures & Videos
- Physical Verification of Mining Site With Pictures & Videos
- Full List of Registered Company Directors
And much more based on the client’s requirements.
You can read more about the service here.
If you simply want general commodity trade consulting in Nigeria spanning through Due diligence & proper verifications of both parties, understanding the entire Nigerian commodity trading industry, identifying and completing all due trade registrations, clearing & forwarding of the commodities, market research/feasibility study reports, and much more, Globexia Limited is the right partner to talk to.
You can call +2348080888162 or email [email protected]
Professional Business Plan Writing Service
Writing a bank and investor ready professional Diesel Supply business plan can be challenging. If you need a professional and affordable business plan service, StartupTipsDaily’s MBA standard professional business plan writing service is perfect for your business.
All you have to do is request an understanding of your proposed business model, and you’d have a professional MBA standard business plan ready for you in anywhere from 5 to 14 days. You can click here to get started with using StartupTipsDaily’s professional business plan writing service to create the perfect business plan that’d get accepted anywhere.
Good tips, thanks for this.
Thank you for the comment, Rejoyce.
Do have a great time!
Good one from. Thank you!
This is so professional and generous.
i’d love to keep in touch.
I’m a young man wanting to venture into diesel supply business. Was going thru the net when I came across your piece.
Pls I need to keep in touch for a possible appointment.
Please I would love to start up this please like how much will it cost to start ….
We can prepare you a feasibility study.
Please send an email to [email protected]
I love this, I intend to start it up pls. How do I reach you guys??
Please send an email to [email protected].
Wow Nice One I Like The Write Up,it Really Open Mind,still Need To Ask Some Things. Thanks
Great write up sir, you said it all and I believe you talk with experience, meanwhile for any quantity of a quality diesel delivery and supply at a very cheap price just contact
This was powerful and very informational. Pls do keep it up!
Thank you for reading, Damilola.
Thank you for this too much value given for free.