Petrol pump business plan | cost, profit| How to start?

how to start a petrol pump business?

Petrol pump business plan is a lucrative business idea for young entrepreneurs and business person to start this business you will need more investment and strategic plan to start the petrol pump business.

Oil is the profit-making industry since the 18th century and still it is there are lots of companies in the market which are providing diesel, LPG, gas and many more.

Sometimes good business connections will help you to start this and of businesses.

In today’s world, personal vehicles have a huge demand and increasing rapidly.

You see. There are more personal vehicles than public vehicles in our city.

And we all know that vehicles need fuel. There are many eco-friendly alternatives to save the earth from the emissions of fuel like CNG and LPG. But because of an increasing number of vehicles, the demand for gas is increasing day by day.

In today’s date, starting a petrol pump business of your own is a very lucrative idea for young entrepreneurs. More and more people are buying vehicles day by day, Oil business is a money-making business for a long time. Then why we are not a part of it.

You can open a petrol bunk business in the city or, closer to Highway routes, this business will be profitable everywhere.

Your profit will depend upon the amount of petrol, diesel, or gas sold annually. And your profit margin will be huge also. the fuel demand will hardly decrease in future days because of electric vehicles, but not now.

Petrol pump business plan
Petrol pump business plan

If electric generation comes early, then you can modify your petrol bunk into electric charging stations. That wouldn’t be a headache for you.

There are a top 6 oil companies in India. Here is the list.

  • Indian Oil. Indian Oil Corporation is the biggest oil company and also India’s most profitable state-owned company.
  • Bharat Petroleum.
  • Hindustan Petroleum.
  • Reliance Petroleum.
  • Shell.
  • Essar Oil.

Read more: How to start reliance petrol pump dealership business?

Eligibility criteria for the petrol pump business plan in India.

Our Indian government has set up some certain guidelines to start a petrol pump business plan in India.

  • The first one is you should be a citizen of India. And in this case, if you are NRI then you must have lived in India for at least 182 days.
  • Your minimum age should be between 21 years to a maximum of 55 years.
  • Your birth certificate proof is required for the petrol pump business plan.
  • If you are from rural areas then your minimum education qualification should be 10 + 2.
  • And for the urban areas people your minimum education qualification should be at least 1 University degree. Which is recognized by UGC.
  • This eligibility criteria also says that for the applicants who are from the cc1 category your educational qualification should be the tenth pass and for the cc2 category educational qualification should be 10 + 2 passed.

You will need a minimum investment of 1500000 rupees and if you want to start in urban areas for dealership then it could be around one crore rupees.

Your petrol pump business location should not fall under blacklist or excluded zones.

Read more; Jawa dealership business plan

Land Requirement for petrol pump business in India.

Analyst of the petrol companies chooses the land for petrol pump. They usually issue advertisements about sanctioned land locations, That’s why you need to ensure your chosen land area comes under that category. Then you can fill the application form. You will also need to ensure below land criteria:

The land has to be either owned by you or leased for the period.

You need legal documentation of the land for the verification process.

The area of land required for petrol pump should be at least between 800 sq meters to 2000 sq meters depending on the location wise

Whichever Land you choose, that should be developed, leveled, and easily accessible from the road. Customers can come to your petrol pump if it is easily recognizable.

how much does it cost to open a petrol pump dealership?

Investment and Fees – petrol pump business investment

It is not that much easy to start a petrol pump. To opening a petrol pump business in your area, you must have a good investment capacity to start with. You have an option to invest your money into this business.

Rs 12 lakhs for rural areas and Rs 25 lakhs for urban areas, though the amount of investment may vary from company to company.
Your investment of petrol pump can acceptable in the below modes:

  • National Savings Certificates
  • Bonds
  • Shares of listed Companies in Demat Form
  • Mutual funds
  • Saving account funds
  • Bank deposits
  • Cash, jewelry, the current account balance is not acceptable for investment in this business

Petrol pump dealership cost

This dealership business will need an investment of 2 crore rupees approximately its includes infrastructure cost, employment salaries, location, processing of land or it could be on leaves also and other extra expenditures in these businesses.

Some of my own friends also doing this business for 10 years and I also got some basics and advance business tips from my friends about this petrol pump business and I am going to share with you this.

All Expenses and Investments required In the petrol pump dealership business In India.
The investment needed to you for the petrol pump dealership business is a minimum of Rs. 50 Lac to 60 Lac in a rural location and for urban it can be up to Rs. 2 Cr approximately. Here is the list of things which you need to know.

Land: If the petrol pump dealer or owner owns the land then there will not be any land purchasing cost. You can get a property on lease.

Machines: Every petrol pump needs to have at least two pump machines to pump petrol from the tank, one machine is for the diesel and another one is for the petrol. These machines can cost you nearly Rs. 10 Lac each. Hence you will need Rs 20 Lac for the machine installation.

The sales room: There must be a saleroom in every petrol pump bunk. The cost of setting up could be varied. But let’s assume, It is approximately Rs. 1-2 Lac.

Canopy and driveway: To install the canopy, you will need 10lac rupees. That means 20 Lac for the canopy and driveway in the petrol pump area of at least 700+ sq meter area.

Underground Tank: The underground tank is the main part, where your petrol is stored whole the time. It is necessary to build it in a secure way. The cost of underground tanks will cost approx 5 Lac. For two tanks (one for petrol and one for diesel) the total cost would be around 10 lakh rupees approximately.

Other expenses: There are other expenses like Documents, license fees, and other retail expenses that must be added to the list.

Application for License of petrol pump business in India.

The very next step is to obtain a license. To establish for opening a petrol pump. Oil Marketing Companies (OMCs) issues advertisements on their official website or newspapers. Then you might set up petrol pumps across different locations.

You need to buy a form for Rs 100 for rural areas, Rs 1000 for urban areas online. You have to fill up the accurate details like personal ID, mark sheets, land details and upload the required documents on the chosen oil company’s website.

When you will get a license, you will need to get a GSTIN number to pay GST. and then open a current account with the name of your petrol pump.

Obtaining Certificates

When your license is sanctioned, the next step is to obtain certain certificates and permissions.

You need to get permission from the Municipal Corporation and Fire Safety Office
NOC from the licensing and other concerned authorities
Location Certificate

What could be the minimum investment to start a petrol pump business in India?

Ans. The minimum investment required to start a petrol pump is about Rs. 15 lakh to 20 lakh and the maximum can be up to Rs. 35 lakh to 40 lakh. It is depending upon the location of the retail outlet of a petrol pump.
How much commission can I earn from a petrol pump dealership?

Ans. The commission you are going to earn from petrol pump dealership varies from agency to agency and location wise also. However, the general commission ranges from Rs. 2 to Rs. 5 per liter. nearly half of the amount the customer paid on petrol bunk per liter is tax, commission, and duty.

Petrol pump dealership income in India.

How much profit in petrol pump dealership business?

Diesel Income at petrol pump stations

In urban areas, the average minimum sales are 5000 liters per day

The commission per liter in City areas is Rs 2

Therefore, 2*5000 =10000 Rs/day and 3 lakhs/month.

In rural areas, the average minimum sales are 2000 liters per day

The commission per liter in a rural area is 1.25 Rs

Therefore, 1.25*2000 = 2500 Rs /day and 75000/month

Petrol Income at petrol bunk stations
On the city side, the average minimum sales are 3000 liters per day

The commission per liter in City areas is Rs 3

Therefore, 3*3000 =9000 Rs/day and 2.2 lakhs/month.

In rural areas, the average minimum sales are 1500 liters per day

The commission per liter in a rural area is 2.25 Rs

Therefore, 2.25*1500 = 3375 Rs /day and 101250 Rs/month.

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