Average Cost of Building A Petrol Station In Nigeria

We are going to analyze the cost of constructing a petrol station in Nigeria.

Petrol is the most patronized product of natural gas in Nigeria for some decades now. In fact, most or all vehicles in Nigeria rely heavily on gasoline for their performance.

So the use of gasoline has been a daily problem for most car owners, businesses, and households in Nigeria.

Thus, there is a need for more petrol filling stations in the country.

I assume you have a vested interest in establishing a gas station in Nigeria that’s why you’re here. If that is the case, you are at the right address.

At the end of our discussion, you should get a sense of the cost of opening a petrol filling station.

We’ll get right on it.

What will it Cost to Get a Gas Station Up and Running?

There are basic requirements; you need to meet when building a gas station. These requirements include the acquisition of a site, registration of your service station, and subsequent construction.

That is the sum-up of the construction of a service station in Nigeria.

It is from these requirements that we just mentioned that we can determine the real cost of starting up a service station in Nigeria.

Let’s go over these individually.

• The Acquisition Cost for a Site

Deciding where to locate your service station will determine how much it will cost to acquire the land. Is it an urban or a rural area? Land acquisition in both types of colonies differs.

To get land for a gas station is very expensive in urban areas compared to rural colonies.

The location of your gas station should also be on the roadside to facilitate accessibility for consumers.

At this point, you must know that it will cost you more money. However, the average cost of acquiring land for a gas station in Nigeria varies from ₦4 million to ₦11 million.

You need to know that this price is not applicable in all parts of Nigeria, particularly in major cities.

In cities like Lagos, Abuja, Port-Harcourt, and other megacities in Nigeria, you definitely know that the cost of purchasing land in these cities will surpass the amount we’ve merely mentioned.

The solid ground in such areas is around ₦100 million and above.

You can even get ₦2 billion Worth of land from those cities.

• Registration Fee

When constructing a service station, you will be required to register with the Independent Petroleum Market Association of Nigeria (IPMAN).

This organization runs the operations of every oil company in the country. It is this association that will authorize you to operate a petrol station in Nigeria.

To register with IPMAN, you need to pay nothing less than  ₦1.2 million.

• Building Cost

There are certain processes involved in constructing a service station. First of all, you will need structural design, fuel dispensers, bay, and construction engineers.

As a result, each of those processes will cost you a certain amount of money.

• Structural Design

It’s got to do with the architectural design of the entire gas station. Your design will describe the outcome of your project, i.e. what your service station will look like once it is completed.

Consequently, for an architectural design for such a project, it will cost you nothing less than ₦800,000.

As a matter of fact, some architects may charge you more than that amount. It’s a matter of how you negotiate with them.

• Installation of Fuel Dispensers

It depends on how many fuel dispensers you have to install in your service station.

For a standard petrol station, you will need a minimum of four fuel dispensers. If you want to sell other things like kerosene and diesel, then you’ll need two more vending machines.

To put all these things together, it’s going to cost you about ₦30 million to ₦35 million.

But in case you want more than those numbers of fuel dispensers for your petrol station, then you can install more than four vending machines. A dual fuel dispenser in Nigeria runs from ₦1.5 million.

For a single fuel dispenser, that’s about₦ 850,000 above.

• Construction of a Bay

This is a key feature in a petrol filling station. You can make part of your lube bay to serve as an office for your workers including your manager and part of it for storing other equipment.

If you decide to sell other things like engine oil, you can use part of the building to do that.

In fact, in Nigeria, some bays have become supermarkets and restaurants. But regardless of your choice, that’s fine, it’s just that having a lubricant bay at a gas station is very necessary.

Therefore, the cost of building a lubricant bay depends on the kind of building you want. However, the average cost will be around ₦9 million or more.

You can spend more than this price if you want an elegant structure like a bay.

• Site Engineers

Compensation for building engineers also varies.

While some engineers will collect a certain amount, another will either be less or higher. So it depends on how you talk to your site engineers.

However, the average cost of such a project for a site engineer is about ₦5 million.

• Other Logistics

These logistics will include the cost of transportation, backup generators, and other additional expenses which will arise subsequently. All of these incremental expenditures will be approximately ₦5 million or more.

So for you to completely start a gas station, you don’t need anything less than $55 million. It may cost you more, depending on where you set up your refueling station and how you want it to look.

You may also find a consultant in building gas stations in Nigeria and find out more about starting a gas station.

The price we have listed above is an approximate estimation of the construction of a gas station in the country at an average level.

There are gas stations that can cost between ₦200 billion and ₦3 billion in Nigeria, particularly in cities such as Lagos, Abuja, Port Harcourt, and so on.

Petrol Station is a very profitable enterprise in Nigeria.

If you put one in operation, you will make a lot of money from it.  So, we hope you have an idea of the cost of constructing a gas station in Nigeria.