Requirements for Filling/Fuel Stations in Nigeria. Daily Law Tips (Tip 781) by Onyekachi Umah, Esq., LL.M, ACIArb(UK)
Introduction:
Nigeria is sadly still a crude oil driven economy, even in the face of laudable innovations and focus on alternatives to crude oil by most economies. Although, Elon Musk believes the world automobiles will soon not need crude oil, Nigeria still has several approvals for the construction of crude oil refineries. Also, most car manufacturers in Nigeria have nothing “Teslaish”, yet. The Naira and Kobo Nation has the African biggest oil refinery being built by its citizen and richest black man; Mr. Aliko Dangote. The unreliable electricity supply across Nigeria, also validates the huge business in the importing and marketing petroleum products across Nigeria for now and for many years to come.
The Federal Government of Nigeria regulates crude oil, petroleum products and dealings on them. The Department of Petroleum Resources (DPR) is a federal agency that regulates the business of dealing on petroleum products in any part of Nigeria. The DPR has a guideline on how to setup and run a filling station, that may market petroleum products, including; Premium Motor Spirit (PMS) popularly known as petrol; Dual Purpose Kerosene (DPK), popularly known as kerosene and Automated Gas Oil (AGO), popularly known as Diesel. The guidelines and roles of DPR are mandatory and violating them is criminal. It is a criminal offence punishable with life imprisonment for any person to deal, package, hawk, sell or trade on petroleum or petroleum products without license.
Checklist:
Below is a checklist showing the requirement for setting up and running a filling station, based on DPR GUIDELINES FOR APPROVAL TO CONSTRUCT AND OPERATE PETROLEUM PRODUCTS FILLING STATION, 2015.
1. Sustainability Check By The Department Of Petroleum Resources
1.1 An application to DPR for site suitability inspection, to cover;
a. Size of the proposed land site.
b. The site does not lie within pipeline or electricity high tension cable Right Of
Way (ROW).
c. The distance from the edge of the road to the nearest pump will not be less
than 15 meters.
d. Total number of petrol stations within 2km stretch of the site on both sides
of the road will not be more than four including the one under
consideration.
e. The distance between an existing station and the proposed one will not be
less than 400 (four hundred) meters.
f. The drainage from the site will not go into a stream or river.
g. In some instances where site is along Federal Highway, a letter of consent
from the Federal Highway is required.
h. DPR guided/supervised Environmental Impact Assessment (EIA) study of the site by DPR accredited consultant.
2. Approval To Construct Filling Station
2.1 If suitability report on the above preliminary issues is favorable, the under
listed documents shall be required for submission to DPR office for review without any obligation on DPR to grant Approval To Construct (ATC), if any negative change to the suitability situation of the site occurs before the grant.
2.1.1 Documents Required For Approval To Construct
a. Application letter addressed to the Operations Controller of the DPR Zonal/Field office nearest to where the location of the proposed station site.
b. Two (2) photocopies of Certificate of Incorporation.
c. Two (2) photocopies of Memorandum and Article of Association.
d. Two (2) photocopies of Current tax clearance.
e. Original and photocopy of Police report.
f. Original and photocopy of Fire report and Certificate.
g. Two (2) original copies of Approved building plan.
h. Two (2) photocopies of letter from Land & Survey.
i. Two (2) photocopies of Deed of conveyance.
j. Environmental Impact Assessment (EIA) report for underground storage tank capacities greater than 270,000 litres.
2.2 After “Approval to construct” is granted, it is mandatory that some meaningful development be made on site within three (3) months from the date approval was granted. The approval expires if no development commences within the time frame.
2.3 Sign Post should be installed on site immediately after approval to construct is granted. The sign post should indicate the name of the company and the reference number of the approval letter.
2.4 Take note that, companies/persons involved in building of Petrol Stations, construction and fabrication of U/G storage tanks and canopy shall have DPR Permit to operate as Oil Industry Service Company.
3. Storage and Licence to Operate a Petrol Station
3.1 After Approval To Construct (ATC) and the construction of the station during which it is mandatory to invite officer(s) of DPR to witness the burial and Pressure/Leak test of the Underground tanks, an application for storage and sales licence to operate the station must be obtained. The following requirements must be met.
3.2 Requirements For Issuance Of Storage And Sales Licence:
The following conditions must be met before storage and sales licence can be granted.
a. A minimum of three (3) underground storage tanks (one each for PMS, DPK, and AGO.)
b. A minimum of three (3) dispensing pumps (one each for PMS, DPK and AGO)
c. Office building: Two (2) offices, sales room, toilet, lube bay/store (Optional).
d. Well concreted forecourt “IN/OUT” drive way inclusive.
e. Wall fence demarcating the station (minimum height of 1.5m high).
f. Good drainage Network.
g. Safety facilities (Fire Extinguishers, Sand Buckets, strategic display of “NO SMOKING” warning signs.
h. Station Sign post/logo of company/outlet.
i. Standard canopy over PMS pumps (mandatory) with company name and logo boldly written.
j. Standby Generator.
k. Accessible potable water source.
l. Standard (51” x 30”) price bill board with changeable price mechanism
3.3 Documents Required For Issuance Of Storage And Sales Licence:
a. Products U/G tanks pressure test report/Certificate and Leak detection test (original printout).
b. Photographs of the station 8” X 10” (not computer-generated photographs (snapped from different angles such that in and out driveways pumps and other facilities are clearly shown.
c. Current Fire certificate.
d. Application form with Bank draft attached (amount depends on storage capacity).
e. Evidence of trained attendants.
f. Application letter addressed to: The Operations Controller, Department of Petroleum Resources.
4. Take-Over Of Petrol Station
4.1 The above requirements and documents are also applicable for a takeover station in addition to the following: –
4.2 Documents Required For Take-Over Of Stations; are
a. Two (2) photocopies of certificate of Incorporation
b. Two (2) photocopies of Memorandum & Article of Association
c. Two (2) photocopies of Current tax clearance
d. Original and photocopy of Current Fire Service report and certificate
e. Two (2) original copies of approved building plan.
f. Original copy of previous storage and sales licence
g. Pressure test certificate/report & Leak detection print out (original & photocopy).
h. Evidence of trained pump attendants (original & photocopy).
i. Completed application form with Bank draft depending on the total storage capacity applied for
j. Receipt of purchase (if it is an outright purchase, Management agreement)
k. Release/Takeover letter on company’s letter headed paper
l. Station’s photographs taken from different angles showing the followings:
i. Station’s name
ii. A fire extinguishers & a sand bucket on each dispensing pump island
iii. Price bill board measuring 51” by 30” with fonts size 6” by 3”
iv. Clearly demarcated drive IN/OUT Ways
v. “NO SMOKING” signs conspicuously displayed in the station.
m. Where photocopies of documents are required, the originals should be tendered for sighting and returned to applicant.
5. Requirements To Operate A Petrol Filling Station
5.1 In addition to the major requirements on the “Approval to Operate Filling Station” issued along with the maiden licence of a station, the following are also mandatory:-
a. Functional Fire fighting gadgets must be kept handy and at alert.
b. Ensure that a station Manager/Supervisor is always at the station
c. Always make available alternative source of power to operate products pumps and adequate illumination of the station.
d. Products are sold at prevailing government approved price
e. Products pumps accurate dispense/display of volume and price
f. Pump attendants trained and dressed in safety wears
g. Ensure that vehicle engines are switched off before fueling
h. Strategic and conspicuous display of warning signs on “NO SMOKING and NO USE OF CELLPHONE” within the station
i. Stations always maintain good housekeeping.
j. Tanker trucks are earthed before starting and throughout products discharge
k. Copy of each way-bill for products on sale shall have to be available at the station at all times.
l. Products in tanker trucks to be discharged into storage tanks shall have to be allowed to settle for at least two (2) hours while in the station before the discharge.
m. Display of Current Storage and Sales licence in the station’s office.
n. Availability of DPR inspections log book in the station
o. Unrestricted access to DPR officials to carry out statutory functions in the station.
Conclusion:
Until there is no need for crude oil, the Department of Petroleum Resources (DPR) will remain relevant. There cannot be a lawful business on petroleum products in any part of Nigeria without the permission of the DPR. Above is the checklist for requirements for any individual or company that have interest in the marketing of petrol products, through filling stations in any part of Nigeria. It is a criminal offence punishable with life imprisonment for any person to deal, package, hawk, sell or trade on petroleum or petroleum products without license.
My authorities, are:
- Sections 1, 2, 3, 4, 5, 6, 318 and 319 of the Constitution of the Federal Republic of Nigeria, 1999.
- Section 1, 4, 6, 8, 9 and 16 of the Petroleum Act, 1969
- Section 1(17) of the Miscellaneous Offences Act.
- Onyekachi Umah, “Punishment for Illegal Dealing on Petroleum Products” (LearnNigerianLaws.com, 8 February 2018) <https://learnnigerianlaws.com/punishment-for-illegal-dealing-on-petroleum-products/> accessed 23 April 2021
- Onyekachi Umah, “Punishment for Price Increment during COVID-19 Lockdown in Lagos State” (LearnNigerianLaws.com, 13 April 2020) <https://learnnigerianlaws.com/punishment-for-price-increment-during-covid-19-lockdown-in-lagos-state/> accessed 23 April 2021
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