20/12/2023
OPENING A PETROL STATION IN SA.
South Africa pumps more petrol than any other country on the continent β some 11.7 billion litres per year, according to the Department of Energy. Diesel isn't far behind. Although traffic levels dropped off significantly during 2020's Covid-19 lockdowns, and may take some time to recover, petrol stations are still likely to generate profits for a while to come yet.
The profits from these billions of litres of fuel donβt all end up in the pockets of petrol station owners. Factors like labour costs, fluctuating oil prices, port delays, the power of large oil companies and the strength of the rand, can all impact on station owner profit margins.
This is a business that has no downtime. Most filling station franchises must remain open 24/7, so understanding our dependence on petrol and diesel therefore makes the fuel retail industry very resilient. There are about 5,000 service stations in South Africa, according to the Department of Energy, and these have an annual turnover of approximately R220 billion.
Fuel stations are also starting to diversify, which means there's potential to add other income streams to your business. Although fuel sales still make up the majority of the profits at filling stations in South Africa, the additional income from forecourt businesses like convenience stores, coffee shops and restaurants can be a nice supplement.
In South Africa you can either start an Independent Filling Station, or buy an Existing Franchise, each of which has its own pros and cons. And if you're buying an existing station, either independently or privately, the magic number that influences the price is usually on how much fuel the station pumps per month on average.
OPENING AN INDEPENDENT FUEL STATION:
The independent route allows for greater freedom & greater profit without the restrictions of a parent company. If you know what youβre doing & have enough cash, you can establish a filling station with your own brand.
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