SETTING UP PETROL PUMP BUSINESS ( ALL IN ALL) #1
- Ca Sunil Sakral
- Jan 9, 2021
- 3 min read
Dear Readers and upcoming entrepreneurs if you wish to start the business and having some capital and having the willingness to set up your petrol pump in association with leading companies like Indian Oil, Hindustan Petrol pump, Bharat petroleum then this blog is very important for you to read. Let's do deep dive into the terms conditions, eligibility of persons who wish to start:-
Eligibility for taking petrol pump dealership :
Age Criteria: Applicant should be minimum 21 years and maximum of 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 the dealership in rural areas
Maximum investment amount: Rs 2 crore or more for dealerships in urban areas
The business area should not be in blacklisted or excluded zones
Investment required to a start Petrol Pump
To open a petrol pump in rural areas, the applicant needs to have funding of minimum of Rs. 15 – Rs. 20 lakh. Whereas, for opening a petrol pump in urban areas the investment amount can go up to Rs. 30 – Rs. 35 (if land is self-owned). Besides cash and jewellery, the applicant can use the below-mentioned types of fund for opening a petrol pump:
Bank deposits
Fixed Deposits
Mutual Funds
National Saving Certificates
Saving accounts
Bonds and shares
Postal Scheme
Only 60% of value shall be considered for mutual funds, bonds and shares
Land Required
Applicant must have land under his/her own name or areas where land can be taken on lease for long term, as per the notification ( by the respective company). There are two types of retail outlets :
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, area of 800 sq. meters – 1400 sq. meters is suitable for opening a petrol pump.
Fixed Fees
If an applicant owns land for the same purpose and in the 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, the person needs to pay fees of Rs. 10 lakh for rural site and Rs. 30 lakh for a regular site.
How to apply for Dealership
Leading Oil Marketing Companies publish advertisements in the newspaper or online related to their plans at various cities and locations of the country. Applicants can apply online by visiting the 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 names of applicants through the lottery system.
Certificates and Permissions
Opening a Petrol pump is not an easy task one have to take so many Permissions from different departments some of are as follows:
Location’s Certified copy
Permission from the Municipal Corporation Department (MCD) & Fire Safety Office
Certification and NOC from related authorities
No Objection Certificate (NOC) from Licensing Authority
NOC from the owner of the properties ( if the owner os different )
NOCfrom fire department
Character certificate of applicant (s)
The Applicant may be any one from - individual , partnership, body corporates as specified by the notifications.
the most important question for this business is:-
Q. What is the commission of petrol pump dealerships?
Ans. The commission of petrol pump dealership depends on agency and location. whereas, the general commission ranges from Rs. 2 to Rs. 4 per litre and nearly half of the amount paid on petrol per litre.
Total commission illustration-
Example - Sold 40000 ltr Diesel in a month commission will be - 40000 x 3 ( avg rate)= 120000.
and sold 150000 ltr Petrole in a month commission will be - 150000X 1.5 ( avg rate) = 225000.
So with calculation, we can say for a month total commission can be earned by proposed owner - 345000/- after reducing maximum expenses of 50 % owner may earn net profit of Rupees 172500/-
The key factor for succeeding the petrol pump is the location of petrol pump , the busiest location with vehicles will get more customers and earn maximum profit.
For sample Agreement format with company and applicant after selection Click Here
Compiled by
Ca Sunil Sakal
9999512184
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