Fuel is an essential commodity used by almost every household in Kenya. The idea of bringing fuel services closer to people, particularly in rural and semi-urban areas, through mobile fuel distribution can be a profitable venture. Many people in rural areas buy fuel, especially kerosene, at relatively higher prices due to the involvement of multiple middlemen. This business idea aims to reduce costs and sell fuel at lower prices, benefiting the local communities. The projected annual revenue for this venture is $436,800, with a net profit margin of 12% and a payback period of 5 months.

Investment Scale, Capital Requirements & Equipment

The investment scale and capital requirements depend on the specific objectives of the entrepreneur. The necessary equipment for mobile fuel distribution will vary based on the scale and scope of the operations.

General Costs (Overheads)

To evaluate the financial aspects of the business, it is important to consider general costs and overheads. Production costs are estimated for 312 days per year, with a daily supply of 1,000 liters of kerosene. Depreciation is assumed based on a 4-year write-off period at a rate of 25% per year for all assets. Direct costs include materials, supplies, and other expenses directly related to fuel production and distribution. The total monthly working days are assumed to be 26.

Conclusion

Establishing a mobile fuel distribution service in Kenya brings convenience and affordability to rural and semi-urban areas, where access to fuel can be limited and expensive. By eliminating unnecessary intermediaries, entrepreneurs can offer fuel at lower prices, benefiting the local communities and reducing the financial burden on households. However, it is important to ensure compliance with safety regulations and maintain high-quality standards. Mobile fuel distribution not only provides a profitable business opportunity but also contributes to the economic development and well-being of communities across Kenya.