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How To Open Petrol Pump – Dealership Profit, Licensing & Investment

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starting a petrol pump business is very profitable

If you want to open your own petrol pump business then you have come to right place. In this comprehensive researched article I will discuss about various topics which are given below:-

  1. Profit margin in petrol pump business
  2. How much money does a petrol pump owner make in India in general?
  3. Is it profitable to open a petrol bunk in India?
  4. How to start a petrol pump business in India?
  5. Petrol pump dealership investment and commission
  6. Investment required to start petrol pump in rural and urban areas
  7. Petrol pump dealership opportunity and how to apply for dealership
  8. Petrol pump license eligibility criteria
  9. Why you should start a petrol pump?
  10. Business basics
  11. The market
  12. Conclusion

Profit margin in petrol pump business

Lets have a look at dealer’s profit margin:- Generally profit margin for diesel is Rs 1.8 for selling 1 litre of petrol and Rs 1.2 for selling 1 litre of diesel. As you can see that this is low margin business and one can generate good profit per month by having a nice location for his/her petrol pump. Also, this profit margin varies for every dealer.

Final profit in this business depends on various other factors such as:-

  • Monthly rent to land owners if its rented property
  • Staff salary
  • Electricity bill
  • Fuel transportation expenses and loss of petrol in transportation
  • Maintenance and accounting expenses

How much money does petrol pump owner make in India?

Let’s do the math:-

PARTICULARSDieselPetrolTotal
Net profitRs 3,58,000 Monthly
Average sales per month250000 Litre150000 Litre400000 Litre
Your commission per litreRs 1.2/litreRs 1.8/litreRs 3.0/litre
Gross earningRs 3,00,000Rs 2,70,000Rs 5,70,000 per month
Expenses
Staff Salary – 10 staffRs 1,00,000 monthly
If rented propertyRs 40,000 monthly
Electricity BillRs 12,000 monthly
Miscellaneous expenses per monthRs 10,000 monthly
Average product lost in transportation, etcRs 50,000 monthly
Total expenses monthlyRs 2,12,000

Above chart is average calculation. Net profit also depends on location of petrol pump because if it is in urban city areas then sale of petrol will be more as compared to diesels. If it is installed in a highway then diesel  sale will be more.

If you have properly managed this business then you could expect a good net profit. Many petrol bunks in India is not properly managed and at the end they suffer losses.

Is it profitable to open a petrol bunk in India?

Yes, it is profitable if you manage it properly.

How to start a petrol pump business  in India?

Procedure:-

  • Register a firm (Private Limited Company) . It can also be done after final selection by company
  • Complete tax registration
  • Check advertisement in newspaper by various companies like hindustan petroleum, Bharat Petroleum, Indian Oil, Reliance Petroleum, Essar Petroleum, Shell Petroleum, etc.
  • Make sure that you meet the eligibility criteria (given below).
  • Further selection process and then final selection.
  • Deposit amount – for Bharat Petroleum is 15 Lakhs(non-refundable)

Investment required to start petrol pump in rural and urban areas

Total investment is around 50 lakhs to 2 crores and it depends on locality. It will cost less i.e 50 – 60 lakhs in rural areas but in urban areas it will cost more because it is difficult to get license.

Why open a petrol pump?

In today’s world, personal vehicles have increased manifold. There are more personal vehicles than public vehicles. Either way, all vehicles need fuel. Many eco-friendly alternatives have been introduced to save the earth from the noxious emissions of fuel like CNG and LPG. But with the increasing amount of vehicles, the demand for gas is increasing with each passing day. At this present scenario, starting a petrol pump of your own is a very lucrative idea. More and more people will be buying vehicles and that way, this is one field that will hardly never lose its touch. Whether you are opening a pump in the city or on the outskirts, closer to Highway routes, the business will be profitable everywhere. In modern day situation, this business is more lucrative. Your profit will depend upon the amount of petrol diesel or gas sold annually and your profit margin would also vary.Nonetheless, the fuel demand will hardly decrease.

Business basics

All types of business requires not only sufficient knowledge but also money. Since it is a petrol pump and you will be dealing with highly inflammable liquids, ensuring all sorts of safety measures is very important. Even the slightest mistake could lead to a major accident. That is why; you need to first acquire a proper license to open a pump. There are certain tests and standards that need to be passed for you to acquire your license. Once all the safety measures and standards are carefully met, you can start with your legal procedures.

Signing necessary bonds and papers are important since most petrol pumps are government undertakings. Even if you are opening a private pump, you need to be registered with the required authorities to ensure that your business is legal.

Location matters a lot!

Location of the pump is also important. If you are choosing to open the pump in the city, it will be better to open it some place there is no other pump in the vicinity. Opening a new pump there will definitely draw more customers. In case you are choosing the outskirts or choosing to start the pump close to Highway routes, that would also be more lucrative. Highways do not have a lot of settlements close by which is why it is also safer to open a pump there. Moreover, people never know when they run out of fuel which is why starting a pump there will automatically attract more customers.

Petrol and diesel do not come cheap, neither do CNG. For this reason, it is very important to ensure that your business funding is regular and sufficient. If it is not taken care of, there could be chances of incurring losses. Therefore, keeping in mind about steady investment is necessary.

The market

There is only one market that can be targeted, that of the vehicles. All vehicles need fuel which is why petrol pumps keep all the fuels available. Many cities in India are now shifting to CNG immediately instead of petrol and diesel. CNG is neither very expensive nor as heavy as petrol and diesel. Moreover it is totally eco-friendly. So, keeping CNG dispensers in your pump would be your step towards making a better and cleaner environment.

Conclusion

While opening a pump, you must also sign several documents that will provide with the knowledge of the emission standards of all fuel. That way if anything illegal happens, you can immediately inform the necessary authorities and also be safe on your side.

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18 Comments

18 Comments

  1. Rajiv V Nagrale

    October 5, 2017 at 2:58 pm

    I have 1.5 ekar land on the nagbhir to bramhapuri highway in chandrapur dist. Iwant to open petrol pump this land.

  2. DHARMENDER DHANDA

    October 22, 2017 at 5:53 pm

    hello sir
    VPO GATAULI, DISTT JIND, STATE HARYANA PIN CODE 126114
    PETROL PER DAY 20000-30000
    DIESEL PER DAY 35000-45000
    NH 71 GATAULI
    MUJHE PAMP DILERSHIP CHAHIYE

  3. Babu Gurjar

    November 12, 2017 at 10:46 am

    Hello sir
    I have 1ekar land on the Jaipur to Indore highway in jhalra patan dist. Jhalawar rajestan to open petrol pump this land

  4. Abhijit malode

    November 16, 2017 at 4:16 am

    I want to open my own petrol pump but problem is I have not my own land the land is available of 4000 sq feet of my friend so can take on lese so how to mange this type of typical condition please reply me sir

  5. swapnil mhaske

    November 20, 2017 at 3:01 pm

    sir
    ek din me kam se kam kitana litter disel aur kitana liter petrol (sell) hona chahiye .aur esame profit kitana milta hai.

    aur licence ko kitana kharcha ata hai

    • bagyalakshmi

      August 31, 2018 at 8:33 am

      Sir
      I am bagyalakshmi from udumalaipettai.I need information about petrol bunk business.I am interested to start petrol bunk in my area.I am completed MSc.I need dealership for guidance.plz help….

  6. VASEEM ANSARI

    November 21, 2017 at 7:32 pm

    Sir, I want to start petrol pump on N.H NO.3- NEAR MALEGAON CITY. Please help.

  7. nagendra Singh

    November 24, 2017 at 4:15 am

    I want to set up in rural area what space is required for pump

  8. shobhit rajawat

    December 6, 2017 at 5:05 am

    sir mujai delarship chayai for india jalaun ya auiyia 206122, 285125

  9. MAINUL HAQUE

    December 15, 2017 at 10:15 am

    I WANT TO DEALERSHIP FOR PETROL PUMP.I HAVE OWN LAND THE LAND IS AVAILABLE OF 4000 SQ FEET.THE PETROL PUMPS LOCATION IS BENAGRAM NEAR KISSAN MANDDY BIOCK -RAMPUR HAT 2 ,P.S-MARGRAM,MARGRAM ROAD,DIST-BIRBHUM,WEST BENGAL

  10. IFTEKHAR ALAM

    January 11, 2018 at 2:12 pm

    DEAR SIR,
    I AM INTERESTED TO OPEN PETROL PUMP I HAVE MET WITH ALL THE CRITERIA GIVEN BY YOU

    I HAVE MY OWN LAND ON THE LOCATION –
    SAGRI , DIST-AZAMGARH,UTTAR PRADESH
    PIN CODE -276138
    MOB, NO, 09971824786

    WAITING FOR YOUR PROMPT REPLY

  11. Panduranga

    February 24, 2018 at 9:01 am

    I want make own petrol pump I have 7 acr land pls guide me how to start

  12. DEVANAND BALAK MATHARE

    February 26, 2018 at 5:44 am

    I Am INTRESTED OPEN PETROL PUMP BUT HELP ME FOR INFORMATION

  13. Balappa p m

    May 24, 2018 at 5:58 am

    I have won land at banglore to Coimbatore national High way, I have plane to establish fuel station in my land. I regards more information about this business

  14. KARTAR SINGH

    July 2, 2018 at 7:19 am

    We want to petrol pump on kosi kamar road Teh-Chhata, Dist-Mathura uttar Pradesh. No issue related to land. no one petrol pump in range 30kms radious. Area sales manager not respond so pl help.

  15. Ram

    July 16, 2018 at 1:42 pm

    Sir perambalur to ariyalur district in tamilnadu my own land 1akr how to open petrol punp open

  16. Shubham kuthe

    July 30, 2018 at 5:24 pm

    I am interested open petrol pump but help me for information

  17. Premsingh Choudhary

    September 8, 2018 at 5:21 pm

    I Am INTRESTED OPEN PETROL PUMP BUT HELP ME FOR INFORMATION

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