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The petrol pump business is one of the most lucrative business models across the world. Though establishing and running a petrol pump business might seem daunting to many, given the number of formalities and administrative procedures involved, the returns far outweigh the efforts. Here’s a comprehensive guide to establishing and running your very own petrol business.

A Step-by-Step Guide to Starting a Petrol Pump

Given that it is a highly regulated industry, there are a number of steps involved in starting a business. Here’s a breakdown of the steps involved in starting a petrol pump business.

  • Make a Business Plan

The first order of business while trying to start any business is making a comprehensive business plan that is sustainable in the long run and takes into account all your unique advantages and disadvantages.

However, it always helps to have a detailed business plan that you can follow while also leaving some space for the unknown. For many, a business plan will include funds required, manpower required, administrative tasks, business goals to achieve, etc.

  • Source Funds

Depending on the location, you might need anywhere from ₹10 Lakhs to ₹25 Lakhs to get started with your petrol pump business. If you have the entire funding available, then that’s all well and good, you can get started with your business as per plan. However, if you don’t have the funds readily available to you, you might want to consider other options for funding your business. This can include business loans or personal loans.

  • Study Competition

In order to be more strategic and make informed decisions that are instrumental to your success, it’s important that you study your competition. This can be a great way for you to understand the business model a little bit better. This will also help you recognise a number of opportunities that you can seize while also giving you an idea of the potential mistakes to avoid for success. This will help you position yourself and your business for growth and success.

  • Land Required

Since a petrol pump business is one that is land-intensive, it’s crucial that you find a piece of land that’s ideal for your business model. Highways, main roads or roads where there is demand for petrol pumps but not supply can be considered. It’s also important that you choose a piece of land that is compatible with the petrol pump business model.

  • Finding a location

The location of your petrol station is imperative to the success of your business. This is why it’s important to do some research and understand the location of your business better before establishing your business unit. Understand the demand in the location and compare it to demand in other locations to understand if your location is ideal for your business. 

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Applying for a Petrol Pump Dealership

Entrepreneurs must acquire franchising licences or other applicable licences from any public or private sector Oil Marketing Companies (OMCs). OMCs will inform the public regarding openings through advertisements in newspapers or online portals. Interested applicants can apply through the OMC’s online application portal or write to the address mentioned in the advertisement. In case there are a number of applicants applying for the same location then the OMCs will conduct a lottery or a bid to arrive at a winner.

List of Leading OMCs

Here’s a list of leading OMCs in India:

  • Indraprastha Gas Ltd. (IGL)

  • Bharat Petroleum Corp. Ltd. (BPCL)

  • Hindustan Petroleum Corp. Ltd. (HPCL)

  • Essar Oil Ltd.

  • Indian Oil Corp. (IOC)

  • Reliance Petroleum Ltd.

  • Oil and Natural Gas Corp. Ltd. (ONGC)

  • Shell India Private Limited, Essar Oil Limited

Legal Registration & Compliances

In order to establish a new petrol pump, you’d need to obtain certain permissions and certificates. Here are a few of them: 

  • NOC(No Objection Certificate) from the  Licensing Authority

  • Location’s certified copy

  • Certification and NOC from other related authorities

  • Permission from the  Fire Safety Office and the Municipal Corporation Department 

FAQs for Petrol Pump Business Plan

Which petrol pump dealership is most preferred by business owners?

There are a number of OMCs that you can choose from, depending on your priorities and needs. To choose an OMC that’s ideal for you, do a thorough analysis of all relevant OMCs and map out their pros and cons to arrive at your preferred OMC. 

How do I get a petrol pump licence?

You can visit your preferred OMC and follow the instructions indicated on their website to get started with obtaining your petrol pump licence.

What is the minimum investment required in starting a Petrol Pump business?

The minimum amount that you’d need in order to get started with a petrol pump business is ₹12 Lakhs in case of rural business units and ₹25 Lakhs in case of urban business units.

What is the commission of petrol pump dealerships?

Petrol pumps get a commission of around ₹2.90 per litre of petrol and around ₹1.85 per litre in the case of diesel.

What is the cost of a petrol pump licence in India?

The licence fee for a petrol pump dealership is  ₹18/KL for Motor Spirit (MS) and  ₹16/KL for High-Speed Diesel (HSD) for dealer owned “B”/“DC” site Retail Outlets and Rs 48/KL for Motor Speed and  ₹41/KL for High-Speed Diesel for a corporation owned “A”/“CC” site Retail Outlets.

Which petrol bunk is considered best in India?

 Bharat Petroleum, Indian Oil and Hindustan Petroleum are three of the most pop

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

In Company Owned Dealer Operated Petrol Pump, the dealer leases their land to a company, the company then makes the investment. Whereas in the case of Dealer Owned Dealer Operated Petrol Pump, the dealer provides the land and also makes infrastructure investments.

What are the benefits of setting up a petrol pump in India?

Though setting up a petrol pump in India is a high-investment business idea, it is also an extremely lucrative one. 

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