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Petrol Pump Business Idea: Eligibility Criteria, Land Requirements, Investment, Profit & More

The petrol pump business plan has long been well-liked all over the world because it is a significant revenue generator. This is one of the most successful business ideas. So, if you are thinking of starting your own petrol pump business, you can refer to this article.

Shruti Kandwal
All business owners need to keep a few things in mind before starting any of these start-up ideas
All business owners need to keep a few things in mind before starting any of these start-up ideas

The petrol pump business has always been regarded as one of the most lucrative industries, both in India and internationally. This is mostly a result of the transportation and logistics sector's constant growth and subsequent demands.

Even though it has a lot of paperwork and legal requirements, it is still one of the top revenue-generating businesses in the country.

All business owners need to keep a few things in mind before starting any of these start-up ideas. In this post, we'll look at how to create the perfect petrol pump business plan and explain why you should start one.

Petrol Pump Business: Eligibility Criteria

The following requirements must be met by anyone in India who wants to operate a petrol pump business.

  • The owners of the petrol pump business must be Indian citizens. This implies that they spent at least 182 days every year in India.

  • The applicant must be at least 21 years old and no older than 55. The applicant is required to submit their birth certificate as proof.

  • The minimal educational requirement for residents in rural areas is a 10+2 (+12-pass) certificate. Meanwhile, for individuals who live in urban areas, the minimum educational requirement necessary is a university degree from a UGC-recognised educational institution. However, candidates from the CC1 category just need a 10th-grade certificate, while those from the CC2 category only need a 10+2 certificate.

  • The aforementioned rules do not apply to freedom fighters, and they are not required to have a certain level of education.

  • The minimum initial investment needed to start a petrol bunk business in rural locations is INR 15 lakhs.

  • The minimum initial investment needed to start a petrol bunk business in urban regions is INR 2 crores.

  • It is not permitted to start a business in an excluded or blacklisted location.

Petrol Pump Business: Land Requirements

Similar to mobile towers, the location of the petrol pump must be determined by the analysis of the petroleum companies. Before moving forward with the application, make sure your chosen land area falls under the category described in the advertisements that these petroleum companies often publish regarding authorized land sites. The following land requirements must also be fulfilled by you:

  • The applicant must either be the owner of the land or hold a lease on it for the time frame specified by the oil dealership.

  • Entrepreneurs must make sure they have all the essential property documents and legal documentation in order to successfully complete the verification process.

  • Depending upon the size of the operation, the land space needed to establish such a business must range from 800 square meters to 2000 square meters.

  • The location needs to be level, well-developed, and conveniently approachable by road.

According to the location assigned, entrepreneurs can open one of two types of retail stores:

  • Regular retail outlets: If the property is near national and state highways or in a city or a town

  • Rural retail outlets: If the land is in rural areas

Fees & Charges

License Fees

16/KL for high-speed diesel for ‘B’/’DC’ retail outlet’s site and Rs. 18/KL for motor spirit

41/KL for high-speed diesel for ‘A’/’CC’ retail outlet site and Rs. 48/KL for motor spirit

Application Fees

The applicant must submit an Rs. 1000 application fee for normal retail outlets and a Rs. 100 application fee for rural retail outlets. People who fall under the SC/ST/OBC categories are given a 50% discount on the application expenses.

Fixed Fees

For conventional retail outlets, applicants must pay Rs. 15 lakh, and for rural retail outlets, Rs. 5 lakh, if they own the land for the same user in the area. The applicant must pay costs for a company-owned dealership of Rs. 10 lakh for rural sites and Rs. 30 lakh for a normal site.

How to Start a Petrol Pump Business in India

  • You need to be on the lookout for advertisements released by oil marketing businesses if you want to get a license for opening a petrol pump business in India.

  • Visit their official website when you see an advertisement to learn more about the OMC's standards and what they are looking for in their dealers.

  • The next step is to purchase an online form, which costs INR 100 for rural areas and INR 1000 for metropolitan areas. People who fall under the SC, ST, or OBC categories will have their application fees reduced by 50%. Then, interested candidates must complete this form by providing the required data.

  • On the official website of the oil company, they must upload the necessary supporting papers after completing the form.

  • The applicant must register under the GST regime and get a GSTIN in order to pay taxes after receiving a license.

  • Additionally, the business owners must open a current account in the name of their petrol pump operation.

  • After completing this, the applicants can continue to get the other licenses and certificates needed to launch their businesses.

Applying for License

The next step is to apply for a license to open a petrol pump. Oil Marketing Companies (OMCs) advertise the installation of petrol pumps in various places on their official website or in newspapers. Potential candidates must:

  • Buy a form for Rs. 100 (rural areas) or Rs. 1000 (urban areas) online, fill it out correctly with the proper information (personal ID, class records, land information, etc.), and upload the necessary paperwork to the website of the oil company of your choice.

  • After receiving the license, the applicant will need to register a current account in the name of his petrol pump and receive a GSTIN number in order to pay GST.

Obtaining Certificates

Before constructing the infrastructure for the petrol pump, the license must first be approved and then specific certificates and permissions must be obtained:

  • Permission from the Municipal Corporation and Fire Safety Office

  • NOC from the licensing and other concerned authorities

  • Location Certificate

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