Petrol Pump Business Plan

Petrol pump business has always been considered one of the leading profit making businesses, not just in India, but globally as well. This is largely because of the ever increasing growth and resultant demands of the transportation and logistics sector.  Another obvious reason being the growing demands of daily commute of the common man. Besides, in today’s day and age, it has almost become a nessacity for a middle class person to own a vehicle to ensure his comfort and convenience in day to day life.

Therefore, opting to start your own petrol pump business is a feasible option in today’s times. Even though it demands a fair bit of legal obligations and paper work, it still stands to be amongst the most profit making businesses in India. Besides, the Oil Marketing Companies (OMCs) are aiming to generate more viable opportunities in order to encourage the growth of petrol pump business in India in 2020-2021.

The procedure and formalities for opening a petrol pump business in India is as follows:

Eligibility Criteria for Opening a Petrol Pump in India

the Government of India has set up certain criteria that has to be met before anyone can start the process of opening a petrol pump in India:

  1. The owner/owners of the petrol pump business should be citizens of India. In case of an NRI applicant, he/she must have lived in India for more than 182 days.
  2. The minimum age limit of the applicant has to be 21 years and the maximum age limit should be no more than 55 years.
  3. Birth certificate proof is required.
  4. For an individual residing in rural areas, the minimum educational qualification required is 10+2 certification. And, for individuals residing in urban areas, the minimum educational qualification should be a university degree certification from a university that is recognised by UGC. For applicants who belong to CC1 category, a 10th certificate is required and for CC2 category, a 10 +2 certification is a must.
  5. Applicants belonging to the freedom fighter category are exempt from the rules.
  6. Minimum investment of Rs 15 lakh or more required to obtain dealership in rural areas.
  7. Minimum investment of Rs 2 crore or more to obtain dealership in urban areas.
  8. The chosen business location should not fall under excluded or blacklisted zones.

Land Requirement

Just like with mobile towers, the land for petrol pump has to be chosen as per the analysis of the petrol companies. These petrol companies usually issue advertisements about sanctioned land locations, so you need to ensure your chosen land area falls under that category before proceeding with the application.  You will also need to ensure you meet the below land criteria:

  1. The land has to be either owned by you or leased for the period agreed upon by the oil dealership.
  2. You need to ensure all the legal documentation of the land is in place for the verification process.
  3. The area of land required should be at least between 800 sq meters to 2000 sq meters depending on the location.
  4. Land chosen should be developed and levelled and easily accessible from the road.

Investment and Fees

To open a petrol pump business, you must have a good investment capacity to start with. There are two types of charges for opening petrol pumps in India:

  1. Rs 12 lakhs for ROs for rural areas and Rs 25 lakhs for ROs in urban areas, though the amount may vary from company to company.
  2. Your funds will be acceptable in the below modes:
    1. National Savings Certificates
    2. Bonds
    3. Shares of listed Companies in Demat Form
    4. Mutual funds
    5. Saving account funds
    6. Bank deposits
  3. Cash, jewellery, current account balance will not be considered for investment in this business.

Application for License

The next step is to obtain a license for opening a petrol pump. For this, Oil Marketing Companies (OMCs) give out advertisements either on their official website or newspapers to set up petrol pumps across different locations. Interested candidates have to:

  1. Buy a form for Rs 100 (rural areas) and Rs 1000 (urban areas) online and duly fill up the accurate details like personal ID, mark sheets, land details and upload the required documents on the chosen oil company’s website.
  2. Once the license is obtained, the applicant will need to get a GSTIN number to pay GST and open a current account with the name of his petrol pump.

Obtaining Certificates

Once the licence is sanctioned, the next step will be to obtain certain certificates and permissions before building the petrol pump infrastructure:

  1. Permission from the Municipal Corporation and Fire Safety Office
  2. NOC from the licensing and other concerned authorities
  3. Location Certificate

Obtain Business Loan for Working Capital Needs

One can get a loan for petrol pump from banks, NBFCs as well as digital NBFCs like Lendingkart which is the current trend. At Lending kart, we also offer:

  1. Loans ranging from Rs 50000 to Rs 2 crore
  2. Short processing time
  3. Repayment period of up to 3 years
  4. Flexibility in instalment periods of repayment
  5. Quick disbursal
  6. Low interest rates

3 step loan application: Submit application on our official website, upload all the required documents and get your loan sanctioned!

Petrol Pump Business Plan FAQs:

1. What is the minimum investment one may require starting a Petrol Pump business?

One needs a minimum of Rs 15-20 Lakhs to start a new business of Petrol Pump.

2. What is the procedure to apply for Petrol Pump dealership in India?

There are regular advertisements by many big dealers of petrol pumps and a direct application along with the relevant documents, GSTIN Number and the fees should be provided on such occasions. The other method is to apply online for the dealership: • The applicant needs to go online and select the website of the petrol pump owner • He needs to click on register now and fill in the application form after logging in with a username and password • He needs to fill in his state, company name, area where the petrol pump needs to be started, whether it’s a sole-proprietorship or partnership, personal and business details etc on the form. • There is a fee which needs to be paid after which a registration number will be provided. The applicant can check for the status of his application using this number.

3. What is the difference between CODO – Company Owned Dealer Operated Petrol Pump and DODO – Dealer Owned Dealer Operated Petrol Pump?

In CODO – The investment is low as the owner only has to invest in land, the rest of investments, fees, charges and expenses will be done by the company.In DODO – All expenses will be borne by the dealer and so he will be rightful owner of all profits as well. This kind of an investment required Rs. 60 lakhs – 1 Crore.

4. Who are the top dealers of Petrol Pump in India?

The top dealers of Petrol Pumps in India are: • Indian oil corporation Limited. • Essar Oil Limited. • Bharat petroleum corporation Limited. • Hindustan petroleum corporation Limited. • Reliance Petroleum Ltd Limited