Petrol Pump Business Plan

Around the world, the petrol pump business plan has always been popular as it is a leading profit earner. The petrol bunk business plan leverages the ever-increasing need for oil and gas due to vast improvements in our transportation system. The increase in the daily commute requirements of the common man has also led to the petrol pump business plan resulting in high-profits.

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Petrol Pump Business Plan

Before starting any such start up business ideas, all entrepreneurs need to have a few things in mind. In this article, we will take a look at how to draft the perfect petrol pump station business plan, and why you should try such a plan out.

Eligibility Criteria for a Petrol Pump Business Plan in India

Anyone who wishes to open up a petrol pump business in India has to meet the following eligibility criteria.

  • The owners of the petrol pump business must be Indian citizens. This means that they must have lived in India for at least 182 days in a year.
  • The applicant must be at least 21 and at the maximum 55 years old. To prove this, the applicant must mandatorily provide their Birth Certificate.
  • For individuals who live in rural areas, the minimum educational qualification required is a 10+2 (+12-pass) certificate. Meanwhile, for those who live in urban areas, the minimum educational qualification required is a university degree from a UGC-recognised educational institution. However, applicants from the CC1 category need only a 10th-pass certificate while CC2 category applicants require only a 10+2 pass-certificate.
  • Freedom fighters are exempt from the rules stated above and do not have to meet any educational qualifications.
  • To start a petrol bunk business in rural areas, the minimum capital investment required is INR 15 lakhs.
  • To start a petrol bunk business in urban areas, the minimum capital investment required is INR 2 crores.
  • The area chosen to start the business must not be either an excluded or blacklisted zone.

What are the Land Requirements for a Petrol Pump Station Business Plan in India?

Similar to starting a mobile tower dealership, entrepreneurs who wish to start a petrol pump station business also need to meet specific land requirement criteria. Most petrol companies advertise their sanctioned and allotted land locations before setting up a plant. Hence, all entrepreneurs must ensure their land falls under the following category before proceeding with the required construction;

  • The applicant must either own or have the land leased in their name for the period stated by the oil dealership.
  • To pass the verification process without any hassle, entrepreneurs must ensure they have all the required property documents and legal documentation.
  • The area of land in consideration to set up such a business must be between 800 sq meters and 2000 sq meters depending on the extent of the operation.
  • The area must be well-developed, levelled, and easily accessible and approachable by road.
  • To open such a business, the entrepreneur should raise investments worth INR 12 lakhs for rural areas and INR 25 lakhs for urban ones. Cash, current account balance, and jewellery do not fall under the categories of accepted investment options. The investment raised may be any one or a combination of the forms listed below
    • National savings certificates
    • Bonds
    • Shares in demat form in listed companies
    • Mutual funds
    • Saving account funds
    • Bank deposits

The two types of retail outlets that entrepreneurs can open according to the location allotted are as follows;

  • Regular retails outlets: If the land is on national and state highways or in urban and semi-urban areas
  • Rural retail outlets: If the land is in rural areas

How to Start a Petrol Pump Business in India

  • To obtain a license for starting a petrol pump business in India, you will have to watch out for advertisements put out by oil marketing companies.
  • Once you spot an advertisement, visit their official website and read up more about what the OMCs requirements are, and what they are looking for in their dealers.
  • Next, you will have to buy an online form for INR 100 in rural areas and INR 1000 for urban ones. People belonging to the SC/ST/OBC categories will receive a 50% concession on this rate of application. Interested applicants must then fill out this form by providing the required information.
  • After filling out the form, they must upload the required supporting documents on the oil company’s official website.
  • After obtaining a license, the applicant must register under the GST regime and obtain a GSTIN to pay taxes.
  • The entrepreneurs will also have to open a current account in the name of their petrol pump business.
  • Once this is done, the applicants can move ahead with obtaining the rest of the required licenses and certificates before starting their operations.

When doing financial analysis for the petrol bunk business plan, the entrepreneur must consider the following expenses and costs;

  • Land
  • Machines
  • Saleroom
  • Canopy and driveway construction
  • Underground tank
  • Dealers’ commission
  • Salaries

One of the most significant costs that entrepreneurs need to consider when starting such a business is the licensing fees of the fuel. The common license fees for various fuels are as follows;

Sl NoType of FuelType of OutletPrice per KL (INR)
1High-speed dieselB/DC retail outlet16
2High-speed dieselA/CC retail outlet41
3Motor spiritB/DC retail outlet18
4Motor spiritA/CC retail outlet18

Documents Required to Start a Petrol Pump Station Business in India

  • Permission from the Municipal Corporation
  • NOC from the Fire Safety Office
  • Location certificate
  • NOC from the licensing authorities
  • Business registration certificate
  • GST registration certificate
  • Address proof of the place of business
  • PAN card of the business and bank account statements
  • ID and address proof of the applicant

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