What is the total cost of opening a petrol pump in India?


When we talk about one of the major profit making buisness the idea of running a petrol pump can not be left behind. So we are going to se e the A 2 Z on how to start and operate a petrol pump india.

It will be a bit long but interesting to read. LETS START

The procedure and formalities for opening a petrol pump business in India is as follows:

Eligibility Criteria for Opening a Petrol Pump in India

the Government of India has set up certain criteria that has to be met before anyone can start the process of opening a petrol pump in India:

  1. The owner/owners of the petrol pump business should be citizens of India. In case of an NRI applicant, he/she must have lived in India for more than 182 days.
  2. The minimum age limit of the applicant has to be 21 years and the maximum age limit should be no more than 55 years.
  3. Birth certificate proof is required.
  4. For an individual residing in rural areas, the minimum educational qualification required is 10+2 certification. And, for individuals residing in urban areas, the minimum educational qualification should be a university degree certification from a university that is recognised by UGC. For applicants who belong to CC1 category, a 10th certificate is required and for CC2 category, a 10 +2 certification is a must.
  5. Applicants belonging to the freedom fighter category are exempt from the rules.
  6. Minimum investment of Rs 15 lakh or more required to obtain dealership in rural areas.
  7. Minimum investment of Rs 2 crore or more to obtain dealership in urban areas.
  8. The chosen business location should not fall under excluded or blacklisted zones.

Land Requirement

Just like with mobile towers, the land for petrol pump has to be chosen as per the analysis of the petrol companies. These petrol companies usually issue advertisements about sanctioned land locations, so you need to ensure your chosen land area falls under that category before proceeding with the application. You will also need to ensure you meet the below land criteria:

  1. The land has to be either owned by you or leased for the period agreed upon by the oil dealership.
  2. You need to ensure all the legal documentation of the land is in place for the verification process.
  3. The area of land required should be at least between 800 sq meters to 2000 sq meters depending on the location.
  4. Land chosen should be developed and levelled and easily accessible from the road.

Investment and Fees

To open a petrol pump business, you must have a good investment capacity to start with. There are two types of charges for opening petrol pumps in India:

  1. Rs 12 lakhs for ROs for rural areas and Rs 25 lakhs for ROs in urban areas, though the amount may vary from company to company.
  2. Your funds will be acceptable in the below modes:National Savings CertificatesBondsShares of listed Companies in Demat FormMutual fundsSaving account fundsBank deposits
  3. Cash, jewellery, current account balance will not be considered for investment in this business.

Application for License

The next step is to obtain a license for opening a petrol pump. For this, Oil Marketing Companies (OMCs) give out advertisements either on their official website or newspapers to set up petrol pumps across different locations. Interested candidates have to:

  1. Buy a form for Rs 100 (rural areas) and Rs 1000 (urban areas) online and duly fill up the accurate details like personal ID, mark sheets, land details and upload the required documents on the chosen oil company’s website.

Obtaining Certificates

Once the licence is sanctioned, the next step will be to obtain certain certificates and permissions before building the petrol pump infrastructure:

  1. Permission from the Municipal Corporation and Fire Safety Office
  2. NOC from the licensing and other concerned authorities
  3. Location Certificate

Obtain Business Loan for Working Capital Needs

One can get a loan for petrol pump from banks, NBFCs as well as digital NBFCs.