Start a Petroleum Business
A petroleum business either stores petroleum products or provides customers with various types of petroleum products such as diesel, unleaded gasoline, kerosene, and liquefied petroleum gas.
In starting a petroleum business, you need to consider what type of petroleum gas you will be selling.
Determine if you will be able to gain a percentage of the current market against your possible competitors. The place is also an important thing to consider, if you are planning to put up a gasoline station, a place where there are no existing gasoline stations is ideal to start your business. If it is also possible, you have search for a place where a lot of vehicles pass by.
Capital also plays an important role in putting up a petroleum business. This will help you to determine what type of petroleum gas you will be able to purchase and sell. Remember that if you put a larger capital, you will gain larger profit too. Knowledge on the business field would also give you an advantage over your possible competitors.
Petroleum business can be classified into three categories namely upstream, midstream, and downstream.
The following are the classifications of a petroleum business:
- Upstream - this requires a large amount of capital, making it almost impossible for a single proprietor to put up.
- Midstream - this type of petroleum business mainly deals with the storage of petroleum products in large quantities. It also requires a large amount of capital. Owners of this type of petroleum business can rent Tank Farms to store the petroleum products. The demand of this type of petroleum business is high that is why if you invest in this type of petroleum business, the possibility of gaining large amount of profit is also high.
- Downstream - this category deals with the distribution of petroleum products. An example of this category is a gasoline station. The marginal profit of this type of petroleum business is lower than the two types of petroleum business above but the frequency of the customers could bring a substantial amount of revenues.
In starting any type of business, insurance is a must to protect not only your business but also the people who work for you. Seek advice from people who actually have an experience in doing this type of business. Preferably, consult people who actually own a petroleum business. Shopping around for insurance companies will help you to decide which insurance policy will best suit your business.
After considering the things above, the next step is to obtain certain legalities, such as business permit or permit to operate. You can consult a lawyer regarding this matter to ensure that you do not violate any laws. Or you can go directly to your city hall and inquire about the requirements in obtaining such legalities.
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