The petrol pump business is undoubtedly one of the leading profit-making businesses in India. The primary reason is its never-ending and ever-increasing demand by some industries, including the transportation/logistics sector, industrial and chemical industries, etc. Though it requires a lot of paperwork and legal formalities to be fulfilled, it still stands as one of the top income-generating businesses across the nation.
So if you are a person who is looking to start a petrol pump business in India and also wants to know the investment details and profits, then this page is for you. We covered everything, right from a detailed petrol pump business plan to executing the same. Read further to find out more.
How to Start a Petrol Pump Business in India?
Anyone who is willing to start a petrol pump business in India must meet all the eligibility criteria set by government officials to start the petrol bunk. So if you are wondering what those eligibility criteria are, then look no further. Here is everything about petrol pump eligibility criteria:
Eligibility Criteria for Starting a Petrol Pump in India
The eligibility criteria for starting a petrol bunk in India are given below:
- The business owner who is looking to start a petrol pump must have Indian citizenship. If an NRI is willing to start a petrol pump business in India, then he/she should have stayed in India for at least 182 days or more.
- The minimum age of the petrol bunk owner should be 21 years of age, and the maximum age is 55 years.
- One must submit a birth certificate while enrolling in the petrol pump business. In this case, business owners can submit their birth certificates, mark sheets, and so on.
- Business owners belonging to the general category must have cleared their Class 10 + 12 exam or equivalent exam. When it comes to SC/ST and other categories, the business owner should have cleared their Class 10 or equivalent exam.
- If you are a business falling under the freedom fighter category, then the educational qualification is not necessary.
- A minimum investment of 15 lakhs and a maximum investment of 2 crores are required.
- The petrol pump business location chosen must not fall under blacklisted zones.
How Much Investment Is Required in a Petrol Pump?
One needs at least Rs. 15 to 20 lakhs in cash to open a petrol pump. Petrol pumps can be opened in both rural and urban areas. Depending on the kind of land that is being used as well as how much land it will take up, the amount required for an investor or entrepreneur to open a petrol pump for their business venture can vary from Rs 30 to approximately Rs 35 lakhs (if the land is self-owned).
Additionally, the following options are available for financing when opening a petrol pump:
- Bank deposits
- Mutual funds
- National Savings Certificates
- Saving account funds
- Shares of listed companies in Demat form
- Postal Schemes
It is important to note that only 60% of the value will be considered by officials for mutual funds, shares, and bonds.
Land Requirements for Starting a Petrol Pump Business in India
When it comes to land requirements, one should make sure they have studied the area and researched their target market to ensure that they open in an area that makes it easy for people to reach their location. A popular example of this would be McDonald’s, which found success by locating themselves on busy street corners but always close to crosswalks so that people didn’t even have to get out of their cars in order to make a purchase!
New entrepreneurs who wish to start their own petrol pump business must also be aware of specific land criteria before beginning the necessary construction.
- Most petrol companies advertise land details and location requirements for new dealerships when making a purchase, so it’s important to have ownership or lease agreements once you reach this stage since all businesses must pass administrative inspections before being formally recognized by the oil industry.
- Entrepreneurs must be able to provide all the necessary property documentation for the land to avoid unexpected delays in the verification process.
- Considering the area you want to open your business in, it should be easily accessible by road, typically with good access around the clock.
- The land must be level and ready to be used for both the operation and parking of vehicles. To maintain health standards, you need to make sure that the local infrastructure is fit for purpose as well.
- You need a lot of lands to build the petrol pump. The exact amount will depend on the space available. Depending on the location, an area of land of between 800 and 2000 square metres is required.
Cost of a Petrol Pump Business License
The next step is to obtain a licence for the opening of a petrol pump. For this, Oil Marketing Companies (OMCs) offer online advertisements in newspapers or on their websites and give out applications at varying costs:
- One should complete an application form and submit any necessary financial documents (such as land ownership papers, bank statements, or proofs of employment or identity). If you are starting a petrol pump in rural areas, then your application form will cost Rs. 100, and if you are coming to urban areas, the application costs Rs. 1000.
- Once the licence is approved, the applicant will have to apply for a GSTIN number. The main objective of the GSTIN number is to pay GST on their petrol business.
- Following that, the business owner should also open a current account in the name of his petrol pump.
Cost of a Petrol Pump License in Detail
The detailed licence cost details to start a petrol pump in India are as follows:
Petrol Pump License Fees
|Petrol Pump License Fees||Petrol Pump License Application Fees||Petrol Pump License Fixed Fees of|
|16/KL for high-speed diesel for “B” or “DC” retail outlet sites and motor spirit at 41/KL. The ‘A’ and ’CC’ or rural sites, both come under the Rs. 18/KL tax bracket, whereas urban areas get a 48/KL tax on high-speed diesel and an Rs. 94/KL motor spirit.||Rs. 100 (rural areas) and Rs. 1000 (urban areas).||If an applicant owns the land for the same purpose and it is located in a rural area, they have to pay Rs. 15 lakh in fees for a regular retail outlet or Rs. 5 lakh in fees for a rural retail outlet. If they own the land with permission to conduct business on their site, then they will have to pay Rs. 30 lakh in fees for regular outlets with permission, or Rs. 10 lakh in fees if their consumer centre is in a rural area with permission.|
Documents Required to Begin a Petrol Pump Business in India
The list of documents that are required to start a petrol pump business in India is as follows:
- Address verification for the place of business
- Business registration certificate
- GST registration certificate
- ID and address proof of the applicant
- Location certificate
- NOC from the Fire Safety Office
- NOC from the licencing authorities
- Business PAN card and bank account statements
- Permission from the Municipal Corporation
How to Start a Petrol Pump Business in India? – Detailed Steps
One will have to register to run a petrol pump business in India. The steps to register for a petrol pump business in India are as follows:
- 1st Step: Visit the official website of Petrol Pump Dealer Chayan or click here.
- 2nd Step: On the homepage, click on the “Register Now” button to create a new account.
- 3rd Step: Soon after registration, you will get login credentials to your registered mail and mobile number. Next, log in with your personal ID and password.
- 4th Step: Now choose the company with whom you want to do the dealership and fill in the state.
- 5th Step: Choose the area where you would like to start a pump and click on the “Apply Now” button.
- 6th Step: Here you will also have an option to choose whether you want to start the petrol pump in “Individual” or “Partnership”. Choose the appropriate option that is suitable for you.
- 7th Step: Now enter all the necessary details and upload the necessary documents.
- 8th Step: Now you will be redirected to the payment gateway where you will pay Rs. 10,000 to finish the process.
Petrol Pump Income Per Day
The profit margin for a typical petrol pump is around 1.8 per cent. It means that selling 1 litre of petrol generates a profit margin of Rs. 1.8. For example, say a petrol pump selling 400 litres of fuel earns ten lakhs. Out of ten lakhs, he/she will have to spend about Rs. 6 lakhs on production costs. Labour wages, maintenance, electricity, interest, and other costs are estimated to be around 6 lakhs. The remaining amount will be the profit before taxes. After taxes, the net profit is between Rs. 2-2.5 lac per month, or between Rs. 24 and 30 lac per year.
Future of Petrol Pump Business
With high rising oil prices, the need for alternatives for transportation fuel is increasing. Not only is the technological innovation of motor vehicles keeping them from becoming more efficient, but a number of alternative fuels are also up and coming. So make to have all the alternative fuels that are required to run your business successfully.
We hope this page on starting a petrol pump business is helpful to you. If you have any queries regarding this page or in general about the petrol pump business in India, ping us through the comment box below and we will get back to you as soon as possible.
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