Petrol Pump business is undoubtedly considered as one of the leading profit making ventures globally. The obvious reason behind is it’s never ending and ever increasing demand by transportation and logistics sector and especially for daily commuting purposes. Though it requires lots of paperwork and legal formalities to be fulfilled, still it stands amongst the top profit generating businesses across the nation.
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Petrol pumps’ license and franchise is required to be obtained from any one of the public and private sector Oil Marketing Companies (OMCs) that include Bharat Petroleum Corp. Ltd. (BPCL), Indian Oil Corp. (IOC), Hindustan Petroleum Corp. Ltd. (HPCL), Reliance Petroleum Ltd., Essar Oil Ltd., Indraprastha Gas Ltd. (IGL), Oil and Natural Gas Corp. Ltd. (ONGC) and many more.
As per the advertisements from the OMCs, opportunities shall be generated to open petrol pumps in 2021. The process involved in opening a petrol pump is not known by many people; therefore let’s discuss some of the important information to open a petrol pump in India.
1. Eligibility to start a Petrol Pump
- Age Criteria: Applicant should be minimum 21 years and maximum 55 years
- Applicant must be an Indian citizen, in case of NRI the applicant must have stayed in India for more than 182 days
- Birth Certificate Proof: 10th class mark sheet
- Education Qualifications: For General category he/she should be 12th pass and for SC/ST/OBC category the applicant should be at least 10th pass
- For opening a petrol pump in urban areas the applicant should be a graduate
- Minimum education criteria is not applicable for freedom fighters under the CC2 category
- Minimum investment amount: Rs. 15 lakh onwards for dealership in rural areas
- Maximum investment amount: Rs 2 crore or more for dealerships in urban areas
- Business area should not be in blacklisted or excluded zones
2. Investment required to a start Petrol Pump
To open a petrol pump in rural areas, the applicant needs to have funding of minimum Rs. 15 – Rs. 20 lakh. Whereas, for opening petrol pump in urban areas the investment amount can go up to Rs. 30 – Rs. 35 (if land is self-owned). Besides cash and jewelry, applicant can use the below mentioned types of fund for opening a petrol pump:
- Bank deposits
- Bonds and shares
- Fixed Deposits
- Mutual Funds
- National Saving Certificates
- Postal Scheme
- Saving accounts
Note: Only 60% of value shall be considered for mutual funds, bonds and shares.
3. Land Required
Applicant must have land under his/her own name or areas where land can be taken on lease for longer tenure, as per the notification. There are two types of retail outlets that can be opened as per the location that are as follows:
i) Regular Retails Outlets: On National and State highways; Urban and Semi-urban areas
ii) Rural Retail Outlets: Land in rural areas but not on national highways
Ideally, the area of 800 sq. meters – 1200 sq. meters is suitable for opening a petrol pump.
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4. Fees and Charges
- 16/KL for high-speed diesel for ‘B’/’DC’ retail outlets site and Rs. 18/KL for motor spirit
- 41/KL for high-speed diesel for ‘A’/’CC’ retail outlet site and Rs. 48/KL for motor spirit
The applicant is required to deposit an applicant fee of Rs. 1000 for regular retail outlets and Rs. 100 for rural retail outlets. SC/ST/OBC category people are offered a 50% concession on the application fees.
If an applicant owns land for the same purpose and in respective area then he/she is required to pay Rs. 15 lakh for regular retail outlets and Rs. 5 lakh for rural retail outlets. For company-owned dealership, applicant needs to pay fees of Rs. 10 lakh for rural site and Rs. 30 lakh for regular site.
Note: The application, fixed and license fees are non-refundable.
Also Read: What is Gumasta license?
5. Applying for a Dealership
Leading Oil Marketing Companies (OMCs) publish advertisements in the newspaper or online related to their plans of setting up number of petrol pumps at various cities and locations of the country. Applicants can apply online by visiting the OMC’s official website for opening a dealership in their desired location or area or can write in at the mentioned address published in the advertisement.
If there are lots of applicants applying for the same area or location then OMCs announces names of winners via lottery system, lots or bidding process.
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6. Certificates and Permissions
To open a petrol pump, an applicant needs to obtain certain certificates and permissions in order to run his/her dealership without any hassle and tension. Few of these include:
- Location’s Certified copy
- No Objection Certificate (NOC) from Licensing Authority
- Permission from the Municipal Corporation Department (MCD) & Fire Safety Office
- Certification and NOC from related authorities
The location of a petrol pump is the key aspect in the success or failure of a business. Petrol pump should be preferably setup at busy national or state highways, residential areas, popular markets, and along-side roads with higher traffic. Post obtaining the license, applicant needs to install petrol pump and oil bunkers, as per the according to the OMC’s specifications and guidelines.
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How to Apply for Business Loan for Petrol Pump?
To apply for business loan, business owner can visit paisabazaar.com to check and compare from all the available options or loan deals to pick as per their business requirements.
FAQs on Petrol Pump Business Ideas
Q. Which petrol pump dealership is best?
Ans. Indian Oil is considered to be the India’s biggest and most profitable oil company. However, it depends on the customers that which dealership is giving them more benefits as compared to the rest. Petrol pump dealership can be obtained of various leading companies that include Indian Oil, Bharat Petroleum, Hindustan Petroleum, Reliance Petroleum, Shell, Essar Oil, ONGC, etc.
Q. How can I start a petrol pump business in India?
Ans. To start a petrol pump in India, business owner needs to clear the eligibility criteria defined by state authorities, needs to show working capital to be invested, should be between 21 years to 55 years of age and should have at least cleared XII standard in studies. Availing a petrol pump business loan can be an added advantage.
Q. How do I get petrol pump license?
Ans. The license to own and operate a petrol pump can be obtained by state authority, as per the location of petrol pump and permission from Municipal Corporation Department of that particular state along with NOCs and copy of location’s certificate.
Q. What is the minimum investment one may require starting a Petrol Pump business?
Ans. The minimum investment required to start a petrol pump is minimum Rs. 15 lakh and maximum can exceed up to Rs. 35 lakh, depending upon location of retail outlet.
Q. What is the commission of petrol pump dealerships?
Ans. The commission of petrol pump dealership varies from agency and location. However, the general commision ranges from Rs. 2 to Rs. 5 per litre and nearly half of the amount paid on petrol per litre is tax, commission and duty.
Q. What is the petrol pump license cost in india?
Ans. The license cost of petrol pumps in India ranges from Rs. 18/KL – Rs. 48/KL for motor spirit depending upon the category of retail outlets (A,B,CC,DC)
Q. Which petrol bunk is best?
Ans. It is difficult to suggest any one petrol bunk out of many, as customers have their own preference and have benefits attached as per their usage or vehicle consumption.