Breakdown of the cost of starting a petrol station in Kenya

Step	Estimated price(Ksh)
Buying/renting land	Variable
Developing your space	300,000-1,000,000
Purchasing fuel pump machines	25,740-130,000 per pump
Hiring operators	13,00-40,000 monthly per person
Supplies	200,000-444,000
Permits	7,500-20,000

How to start a petrol station in Kenya step-by-step guide

Starting a petrol station in Kenya is one lucrative business that you should consider. On average, the cost of starting a petrol station in Kenya ranges between ksh.6,000,000-Ksh.15,000,000 in total.

It is a process that involves a lot of planning, marketing strategy as well a good amount of capital. Therefore, before you settle on starting it, it is important to consider all the factors and be sure you can take care of each of them as they arise. Below, is the detailed approach to starting a petrol station in Kenya as well as the rough costs involved. 

Plan for your business

Planning has always been an important part of starting a business. For a petrol station in Kenya, it is absolutely important to plan very well before you get started. Being one of the businesses that require a very high amount of capital, one needs to be sure of the sources of capital as well as the constant supply.

During the planning phase, you will also need to identify your suppliers, select a very strategic location and find out who your most likely customers will be. This will greatly help you to market your filling station and get identified as soon as possible for maximum profits. After you are well set and budgeted, you can now safely move to the next phase of starting your petrol station in Kenya. 

Purchase/ rent your piece of land at the selected location

This is the next phase of developing your petrol station in Kenya. After selecting a very strategic location, you will need to acquire the space to set up your petrol station. Depending on the location, the amount of money you will spend on renting or purchasing the land will vary. 

Therefore we cannot place a fixed amount for that. However, the step of planning will be very helpful in helping you find a strategic point where you will gain many customers. Finding a piece of land adjacent to a busy road is the best option. This means that unconditionally, there shall be vehicles stopping by to refill. That’s how you get your customers. 

Develop it for the petrol station 

As usual, every piece of land has to be developed before it can be fully usable. For a petrol station, you will need to put up some structures such as the fuel pump sheds, a building to house the supplies, get space for the fuel tanks and many other preparations for the petrol station. 

As you cannot do all this by yourself, you will need an engineer to help you plan and develop all the structures as required. This phase is one very important one that will also determine the success and safety of your customers as they enjoy your services. 

It is during this stage that you will define the capacity of your petrol station. You can also decide to place it with other side businesses such as car repair or car wash services to maximize your profits fully. 

This step also involves laying all the necessary infrastructure such as the fuel tank and the piping as well as setting up all safety measures. By the end of this step, you should have remained with purchasing the fuel pumps and setting them up.

Purchases 

This step is all about the purchases that you will need to make to be successful in setting up your petrol station in Kenya. We have summarized the price on the table at the beginning of this article. The most important thing to start with is the fuel dispensers. 

Fuel dispenser prices vary a lot depending on the power, the type and the capacity. Be sure to find the best vendor to buy from since they need to be safe to use and very efficient for a wonderful customer experience. 

The best option is to import them from international vendors such as Alibaba, made in China or amazon. They might take time to get to Kenya, that is why you are advised to pre-order them preferably 3 months before starting development at your petrol station.

However, you might also consider purchasing them locally. It is actually one of the fastest options available. However, it might not be as cheap. 

After acquiring the fuel pump machines, you can now have them connected to your supply tank and tested for full functionality. The pumps must be tested first to make sure that they work perfectly well. After you are satisfied that they are perfectly okay, you can now move to the next phase. 

Acquiring business permits 

Petrol products are very sensitive. Starting from safety to their high demand, the government has to verify and authorise their use in Kenya. 

This is purely in the interest of the law. You will need to register this as a business to be safe. It does not take a lot of time or money to register your business. Just go to the nearest huduma centre and you will be guided fully. 

There are also permits that one must pay for to run a petrol station. They include fire permits and health permits that are mandatory. For ksh.5,000 you can acquire your permits. 

Other permits would range from ksh.8,000-15,000 to acquire.  After acquiring all the needed permits, you would have gained full permission to run your petrol station in Kenya. 

Hiring petrol station attendants

This is also a very critical part of starting the business. You need to have just the right people to handle your customers.

 If it’s big enough, you will also need management for your staff and financial errands. Take time to hire people you can trust and people that have enough experience to handle this business for you. 

However, if it’s a mini petrol station, you can do a lot of these things yourself. If you will hire, you will hire very few people to help you out. Therefore, take time to gauge your options.

 The attendants will take care of your customers and they will be paid preferably on a monthly basis. 

The salary of one attendant would range from Ksh. 17,000-Ksh 39,000 depending on the duties that have.

Get the fuel supplies

In the initial planning stages, you would have decided on the suppliers for your petrol station. That is why it is important to include them in your plan. This stage will now be very easy. By now, you should have made orders for all the fuel types you need. They will schedule you for their regular supply.

The supplies will start coming in as soon as you request them. Starting from Ksh. 200,000-Ksh. 444,000 would be enough to get your first supplies. By this time, you should be already indicating that you are now open. People will start coming in to access your services. However, you will have a few customers by this time. This will take you to your next step.

Market your petrol station business

Marketing your business is a very key step of this journey. It is final but it is the most important to your business. The number of customers you will get will significantly affect the marketing strategy you use. Marketing might be done through advertisement, either physically or online.

Since there is much focus on social media these days, it will be nice to make sure you launch a campaign on social media to find more customers. Make sure you make people aware of your best services and make them have the urge to experience your services. 

The more you market your business, the more customers you will get, which means more revenue. That’s what we all want, the profits! At this point, you now have a clue on how to as well as the cost of starting a petrol station in Kenya. 

Challenges that come with starting your petrol station in Kenya

As usual, there are always very many problems that come with starting a petrol station in Kenya. Whether it is a small one or a big one, there must be challenges.

It is important to be aware of the challenges even before you get your first foot in the business. Here are a few examples of the challenges that you are most likely to encounter;

very high fuel prices at times

This has always been a challenge in Kenya. Sometimes, fuel prices hike and the demand becomes very low. As long as this happens, you might make a few losses here and there. However, they won’t be as much since people will still need to refill their cars and transport has to go on. Learn more about price of fuel in kenya.

This still remains a challenge that will always affect your business as a petrol station owner. To cater for such situations, you can opt to run another business on the side such as a car wash or auto parts selling or a supply store etc to cushion you for times like those.

Fuel shortage

In the recent past, this has arisen as a big issue in the fuel industry. People there would have a very high demand for fuel but there’s a shortage sometimes. 

This greatly affects the business. If you are capable enough, you can have enough supplies at all times. However, this might cost you a lot more than you imagine. Keeping an eye on the trends in the stock market will help you plan well for such a time.

Emergencies and general losses

This one is part of the biggest challenges but it is rare to come by. Issues such as fire accidents and any other emergencies will always be there. However, they are hard to come by. 

To avoid them, you need to have a very safe system for handling your fuel station. This will keep away fires and any other accidents. Make sure the attendants are also keen on their work to avoid such issues.

That was a quick overview of starting a petrol business in Kenya. Every detail could not be captured in this article, you can download a full pdf guidebook to starting a successful petrol station in Kenya below to get full details for each step to success.

Cost of starting a petrol station in Kenya-FAQs