The petrol pump business has always been considered one of the leading profit-making businesses in India and globally. It is often largely due to the ever-increasing growth and resultant demands of the transportation and logistics sector.
Another obvious reason is the growing demands of the daily commute of the commoner. Besides, today, it’s almost become necessary for a bourgeoisie person to have a vehicle to ensure his comfort and convenience in day-to-day life.
Opening a petroleum distribution in India is often a lucrative business opportunity for people looking to take a position within the fuel retail sector. The petrol pump business idea is undoubtedly considered one of the foremost profitable business ideas in India and globally.
However, it requires significant financial investment, regulatory compliance, careful planning, regulation adherence, detailed industry knowledge, and a well-executed business plan. This article will discuss the eligibility criteria, land requirements, and investment required to open a Petrol Station Business’s Ownership in India.
How To Open A Petrol Station Business
1. Eligibility Criteria
To open a Fuel Station Entrepreneurship in India, you need to meet specific eligibility criteria set by the government. These criteria typically include:
i) Age Criteria
Minimum 21 years & Maximum 55 years
ii) Citizenship
The applicant must be an Indian citizen; in the case of NRI, the applicant must have stayed in India for 182 days.
iii) Birth Certificate Proof
10th class mark sheet
iv) Education Qualifications
For the overall category, they should be the 12th pass, and for the SC/ST/OBC category, the applicant should have a minimum of 10th pass.
The applicant should be a graduate to open a petrol pump business in urban areas.
Minimum education criteria aren’t applicable for freedom fighters under the CC2 category.
v) Minimum investment amount
Rs. 12 – Rs. 15 lakh for dealerships in rural areas (If the land is self-owned)
vi) Maximum investment amount
Rs 20 – Rs. 25 lakh for dealerships in urban areas (If the land is self-owned)
vii) No prior record
viii) Business areas/locations shouldn’t be in blocked or excluded zones.
2. Investment and Fees
If you pass the criteria above the subsequent stage, you have the minimum funds to start an Oil Retail Business or petrol station business. Although the wants may vary from place to place, a general rule of thumb is to prove the power to take a position at a minimum of Rs 13 lakh for rural areas and 25 lakhs for Urban areas.
There may be a list of Funds which will be considered:
- Funds in bank account
- Bonds, Mutual Funds, and Shares (only 60% is considered)
- National Savings Certificate
There may be a list of funds which will NOT be considered:
- Cash, Jewellery, material assets, etc.
- Current Account Funds.
3. Land Requirement
Just like with mobile towers, the land for Gasoline Retail Business has to be chosen per the petrol companies’ analysis. These petrol station companies usually issue advertisements about sanctioned land locations, so you would like to ensure your chosen acreage falls under the category before proceeding with the appliance.
You will also have to make sure you meet the below land criteria:
- The land has got to be owned by you or leased for the amount prescribed by the oil dealership.
- You need to make sure all the legal documentation of the land is in situ for the verification process.
- The land requirements vary, depending on the sort of petrol station business you propose to determine, whether it’s a petrol pump within the populated area, a rural retail outlet (RRO), or on the national highway.
- In rural areas, the land requirement for opening a petrol station is 800 square meters for one dispensing unit and 1200 square meters for 2 dispensing units.
- In urban areas, the land requirement for opening a petroleum pump is 500 square meters for one dispensing unit and 800 square meters for 2 dispensing units.
- On national highways, the land requirement for opening a petroleum pump is 1200 square meters for one dispensing unit and 2000 square meters for 2 dispensing units.
- Ensure that the land you select is found strategically, is accessible to vehicles, and complies with the regulations of the petroleum marketing company you would like to accompany.
4. Application Process
Once you’ve fulfilled the eligibility criteria, acquired suitable land, and arranged the required investment, you’ll proceed with the appliance process for opening a Fuel Retailing business.
The process involves the subsequent steps:
- Select an oil marketing company (OMC) to partner with. Consider factors like brand reputation, network, support, and commission structure.
- Submit the appliance form alongside the specified documents, including proof of eligibility, land ownership/lease documents, and financial statements.
- Pay the appliance fee according to the OMC’s guidelines.
- Await the scrutiny and verification process conducted by the OMC.
- Complete any additional documentation and fulfill the prescribed terms and conditions if selected.
- Obtain the required licenses and permissions from local authorities, including the hearth department, pollution control panel, and district administration.
- Install the fuel dispensing system, storage tanks, safety equipment, and other necessary infrastructure.
- Conduct a final inspection by the concerned authorities, and upon approval, you’ll commence Gas Station Operations as a petroleum pump owner.
5. Start Your Petrol Station Business
Opening a petrol station business in India presents a lucrative business opportunity for aspiring entrepreneurs. You’ll establish a successful petrol pump business by adhering to the eligibility criteria, fulfilling land requirements, making the required investment, and following the appliance process diligently.
Remember to settle on reliable fuel dispenser manufacturers in India to ensure the efficiency and accuracy of your fuel dispensing systems. Conduct thorough research, create a strong Fuel Pump Operations business plan, and seek professional guidance to navigate the complexities of the method.
With determination, meticulous planning, and the right approach, you’ll start a rewarding journey in the Petroleum Industry in India as a petroleum pump owner.
FAQs
1. Which petrol station dealership is most preferred by business owners?
Ans: Indian Oil Corporation Limited is taken into account to be India’s biggest and most profitable company. However, it depends on the purchasers which dealership gives them more benefits than the remainder.
2. How can you start a petroleum pump business in India?
Ans : To start a petrol station business in India, a business owner must clear the eligibility criteria defined by state authorities, must show capital to be invested, should be between 21 years to 55 years old, and will have a minimum of cleared XII standard in studies.
3. How do you buy a petroleum pump license?
Ans : The license to have and operate a petroleum pump is often obtained by state authority, as per the situation of the petrol pump, and permission from the Municipal Corporation Department of that specific state alongside NOCs and a replica of the location’s certificate.
4. What’s the minimum investment required to start a petroleum pump business?
Ans : The minimum investment required to start a petroleum pump is Rs. 15 lakhs; therefore, the maximum can exceed Rs. 35 lakhs, depending on the situation of the fuel retailing outlet.
5. What’s the commission of petrol pump dealerships?
Ans : The commission of petrol station business’s dealerships varies from agency to site. However, the overall commission ranges from Rs. 2 to Rs. 5 per liter, and nearly half the quantity paid on petrol per liter is tax, commission, and duty.
6. How does a petroleum pump operate?
Ans : Petrol pumps store fuel in underground tanks and use pumps, flow meters, and nozzles to dispense the chosen fuel type into a vehicle’s tank, ensuring precise measurement and safe delivery.
7. What are the advantages of fixing a petroleum pump in India?
Ans : Setting up a petroleum pump in India is often a lucrative business venture, as you’ll enjoy the sale of fuel and other related products. You’ll also be eligible for subsidies and incentives from the government. It will help to scale back your costs and improve your profits.
