Not only in India, but around the world, the petrol pump business has traditionally been regarded as one of the most profitable, and hence knowing how to start a petrol pump business is beneficial. This is largely due to the transportation and logistics sector’s ever-increasing growth and resulting demands. Another obvious reason is that the average person’s daily commute is becoming increasingly difficult to meet. Furthermore, owning a vehicle for a middle-class individual to assure his comfort and ease in day-to-day living has nearly become a need in today’s day and age. As a result, starting your own fuel pump business is available alternative in today’s world. Despite the fact that it entails a significant amount of legal duties and paperwork, it is one of India’s most profitable enterprises, and hence knowing what is investment required to start a petrol pump business is important to get started.
If you are wondering how to start a petrol pump business, then following is the procedure and formalities for drawing petrol pump business plan in India.
Eligibility Requirements for Opening a Petrol Station in India
Before someone may begin the process of opening a fuel station in India, the Indian government has established certain conditions that must be met:
- The petrol station’s owner should be Indian citizen. If the applicant is an NRI, he or she must have spent at least 182 days in India.
- The applicant’s age must be at least 21 years old and no older than 55.
- It is necessary to show proof of your birth certificate.
- The minimal educational qualification required for someone living in a rural location is a 10+2 diploma. Individuals living in urban areas should have a university degree from a university recognised by the UGC as the minimum educational qualification. A 10th grade certificate is required for CC1 applicants, while a 10 +2 certificate is required for CC2 applicants.
- Applicants who fall under the category of freedom fighters are exempt from the requirements.
- In order to obtain a dealership in rural areas, you must invest at least Rs 15 lakh.
- To obtain a dealership in urban regions, a minimum investment of Rs 2 crore is required.
- Excluded or blacklisted zones should not be included in the company location selection.
Land Requirements for starting a Petrol Pump
If you are wondering how to start a petrol pump business, then this is an important section. The site for fuel pumps, like mobile towers, must be selected based on the study of the petroleum firms. Before proceeding with the application, make sure your chosen land region is under the category of sanctioned land sites. In addition, you must meet the following land requirements as it helps you assume your petrol pump income per day.
- You must either own or lease the land for the time period agreed upon by the oil dealership.
- For the verification process, you must confirm that all of the land’s legal documentation is in order.
- Depending on the region, the required land space should be between 800 and 2000 square metres.
- The land should be developed and levelled, as well as easily accessible from the road.
Fees and Investment Required to Start a Petrol Pump
This section can help you understand the profit in petrol pump business. The applicant must have a minimum of Rs. 15–20 lakh in funding to open a petrol station in rural areas. In contrast, the cost of establishing a fuel station in a city can range between Rs. 30 and Rs. 35. In addition to cash and jewels, applicants can open a gas station using the money listed below:
- ROs in rural areas are worth Rs 12 lakhs, whereas ROs in metropolitan areas are worth Rs 25 lakhs, though the investment required to start a petrol pump varies by company.
- The following modes will accept your funds:
- National Savings Certificates, Bonds, and Demat Form Shares of Listed Companies
- Mutual funds
- Funds in a savings account
- Deposits in the bank
- This establishment will not accept cash, jewellery, or current account balance as payment.
Fees for Applications
For conventional retail shops, an application cost of Rs. 1000 is necessary, and for rural retail outlets, an application fee of Rs. 100 is required. The application fees are reduced by half for those in the SC/ST/OBC categories.
Fixed fees is an important factor to know the investment required to start petrol pump. An applicant must pay Rs. 15 lakh for conventional retail outlets and Rs. 5 lakh for rural retail outlets if he or she owns land for the same purpose and in the same location. The applicant must pay Rs. 10 lakh for rural sites and Rs. 30 lakh for normal locations for a company-owned dealership as it is a part of petrol pump business plan.
Fees for a License
For the ‘B’/’DC’ retail outlet’s site, high-speed diesel costs Rs. 16/KL, while motor spirit costs Rs. 18/KL.
For ‘A’/’CC’ retail outlet sites, high-speed diesel costs Rs. 41/KL, while motor spirit costs Rs. 48/KL.
Application for License
There is a huge profit in petrol pump business. You can know the petrol pump income per day by understanding the application procedure. The next step is to obtain a gasoline station operating licence. On their official website or in the media, oil marketing companies (OMCs) advertise for fuel pumps to be installed in various locations. Candidates who are interested must meet the following requirements:
- Purchase a form for Rs 100 (rural regions) or Rs 1000 (urban areas) online, complete it with accurate information such as personal identification, mark sheets, and land information, and upload the relevant documents to the oil company’s website.
- After receiving the licence, the applicant must receive a GSTIN number in order to pay GST and open a current account in his petrol pump’s name.
If a large number of applicants apply for the same region or location, OMCs uses a lottery system, lots, or a bidding process to select winners.
Certificates and Permissions
Following the approval of the licence, the next stage will be to get the following certificates and licenses before constructing the petrol pump infrastructure:
- Certified copy of the location
- Licensing Authority’s No Objection Certificate (NOC)
- The Municipal Corporation Department (MCD) and the Fire Safety Office have given their permission.
Certificates and letters of approval from relevant authorities are required as it is an important part of petrol pump business plan.
The location of a gas station is a critical factor in determining whether a company will succeed or fail as it decides your profit in petrol pump business. Petrol stations should ideally be located near busy national or state highways, residential neighborhoods, popular marketplaces, and high-traffic roadways. The applicant must next build a petrol pump and oil bunkers in accordance with the OMC’s requirements and instructions after receiving the licence.