10 Tips to start Fuel Haulage Business

Fuel Haulage Business : Welcome Friend! My discussion today is on how to start fuel haulage business in Nigeria.

Petroleum products are among the classes of goods that require almost every day movement from one part of the country to another.

Transportation of different oil based commodities in Nigeria constitutes one of the greatest haulage opportunities in the nation.

It makes up more than 30 percent of the all products that are being transported all through Nigeria on regular routine.

This article will expose you to the fuel haulage service business in Nigeria.

In the event that you have enough cash to go into haulage business.

I urge you to contemplate having some expertise in transporting petroleum products.

In this article, we focus on what is required to go into fuel haulage services rather than talking about the essentials of haulage business.

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Fuel Haulage Business

1. You Need to Register Your fuel haulage business with NUPENG

One tanker is sufficient for you to register your business with NUPENG.

You have two options during registration, to enlist as individual or as company.

However, you require at least five tankers to have the capacity to get your haulage company registered.

With this, you can start dealing with the big players in the oil marketing business.

All the big players in the petroleum product marketing business such as TOTAL, Mobil, TEXACO, OANDO, need to be known.

Every one of them do go into long haul renting contract.

With registered haulage organizations for the transportation of their products from their tank farms to the filling stations nationwide.

After completing the registration of your company and registration with the big marketers.

The next thing to do is to join the NUPENG.

Here is a short guide I have for you on how to join NUPENG.

It is open to be joined by every single junior worker in the oil well and gas well operation industry.

Including prospecting, boring, oil and gas pipelines, refining, transporting and marketing of petroleum gas and oil based goods – including oil tanker drivers (Haulage).

This does not have anything to do with sex, religions convictions, political affiliation, or ethnicity.

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2. Fuel Haulage Business:Formal Sector

To become a member, your Company’s name is required, where it is located.

That is full details of address, number of staffs willing to join NUPENG in your company.

The payment of agreed dues begins when you become a member of the union.

And your Branch moves toward becoming NUPENG members and it must be an action done by all.

3. Fuel Haulage Business:Informal Sector

Let us know your activities, State and detailed contact, with the goal that we can inform you on the Branch of NUPENG to join.

The Union is for those working in Nigeria.

The capital needed would heavily depend on where you are purchasing your truck and who is helping you purchase.

You needn’t bother with buying new truck unless you have enough cash.

If not, second hand truck commonly known as tokunbo is good for a start.

The cost of a second-hand runs from between N3.5 Million to N4.5 Million.

4. Fuel Haulage Business:Get a New Trailer/ Tanker or Buy a Used one

The startup capital depends heavily on whether you are purchasing a new tanker or a fairly used one.

The cost of a brand new tanker ranges from N 15 Million to N20 Million.

Relying upon the brand and its specifications while the cost of a second hand is between N6 Million to N7 Million.

Notwithstanding, since the entrepreneur would purchase the truck by himself, the start-up capital would depend heavily on his bargaining skills.

The revenue to be generated from the business depends significantly on your management style to be adopted by the entrepreneur.

If the truck owner decides to rent it out, he/she can make N400, 000 –N600, 000 per month as net income.

If a truck sets out on a journey from Lagos to Kano, they charge between N180, 000 to N200, 000 per journey but within Lagos they charge between N40, 000 to N80, 000.

This depends on the distance and the product the truck is transporting.

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5. Fuel Haulage Business:Service Your Truck

After the truck is purchased, you need to do some work on it like servicing.

This is to ensure all parts are functioning properly.

You may also need to change the tires especially if they are weak already.

Weak tires may easily burst and this may result to accident.

All these and more are what you should do to ensure your truck is appropriately used to give maximum yield.

You will manufacture the tank and the trailer locally for about N1.5 million to N2.5 million or less.

6. Know and Abide by fuel haulage business Rules and regulations

Another important consideration is the legal requirements of starting a fuel haulage business.

You would be required to acquire different permits and licenses.

You would also be briefed on the rules and regulations guiding the business.

These rules and regulations must be followed.

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7. Fuel Haulage Business: Get proper fuel haulage Business Insurance

This business is fraught with a lot of risk and dangers.

You would be transporting expensive products which is not your own and which you have to deliver safely.

It is not possible to predict what would happen while on a trip as you will be travelling very long distances.

8. Fuel Haulage Business: Employ Competent Staffs

This is also important. You need to first consider drivers as they major actors in the business.

Your driver can make or break your business.

It is important to first consider how and where to get professional drivers.

Who might be keen on working with you to move the business forward.

You should also consider the marketing and administrative staff as well.

If you intend to start on a small scale, you should be able handle both the administrative and marketing functions yourself.

If you are starting large, you have to employ staffs to assist you in these functions. 

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9. Get the  Essential Methods of Entering The Fuel Haulage Market In Nigeria

There are three {3} essential method of entering the fuel haulage market and they include:

1. As an Independent Operator

2. As a contractor or Sub-contractor

3. Renting out trucks to haulage companies

Independent Operator

You operate your truck and obtain contract from oil marketers all on your own as an independent operator. You also get paid directly for deliveries.

As an independent operator.

You would do your own repair and servicing and employ your driver.

You can choose to hire a manager who would hunt for markets and oversee the day to day running of the business.

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Contractor or Sub-Contractor

As a contractor with an oil marketing company.

Your trucks are managed by the company and they would oversee it for you.

Secure the driver and the servicing and repair and pay you consistently around a sum of N400, 000 to N600, 000.

You must of course, be registered with the company.

As a sub-contractor, you will be under a contractor in that company in order to register your trucks as their own.

They will pay you an agreed sum after removing their own commission.

It is worthy of note that before going into this agreement.

You are fully aware of all the terms and condition of the contract together with your lawyer.

10. Fuel Haulage Business:Renting of truck to Haulage Companies

Renting out the truck to a haulage company is similar to being a contractor with oil marketing company.

The main difference is that this time you are dealing with a haulage company.

Rather than an oil marketing company.

However the terms and condition would most likely be the same.

Here, it is also important to involve your lawyer

A great deal of haulage organizations exist that needs to go into business collaboration with truck with.

To get involved in any of these, you have to get registered with the National Union of Petroleum and Natural Gas Workers {NUPENG}.

As it is difficult to state in particular the startup capital needed for this business.

So it is difficult to to predict how the income you would earn from the business.

These two heavily depends on the management style adopted by the business owner.

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Fuel Haulage Business

Conclusion

An effective transport framework is an important aspect in the production and circulation of refined petroleum products since the majority of the products are transported by road.

Based on statistics, there are about six thousand {6,000} independent marketers of petroleum products.

Nigeria presently uses about sixty million {60,000,000} liters of refined petroleum product {PMS, DPK and AGO} every day.

The country has a population of more than one hundred and sixty-five million {165,000,000} individuals.

Fuel Haulage Business

The development in Nigeria goes at the rate of around 2.7% per annum with an estimated rate of growth of about 5.7% in the last five {5} years.

As such, the market in petroleum products in Nigeria, is as it stands, developing and reasonable. Yet, the market for haulage business is very sustainable.

For sure, most significant oil based commodities marketing organizations like Mobil, CONOIL.

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Fuel Haulage Business

Go into long term renting agreement with truck and tanker organizations for the transportation of their products to their various filling stations the country nationwide.

There are likewise opportunities in gas haulage  business as well.

If you need a complete business plan, please let us know.

Or, you want us to help you set up this business, kindly contact us. Otherwise, Please check out these other business ideas you can do 

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