Petrol pump business is one of the best business ventures and considered as the most profitable business in India. But getting a license is not an easy process. There are so many guidelines and formalities which you have to follow. If you want to open a petrol pump in India and don’t know about the detailed procedure to get a petrol pump license. Do not worry today in this article I am going to tell you everything about the procedure which will be helpful for you. I am starting with an overview of fuel market in India then I will proceed with the procedure.
Petrol Pump Market in India –
Fuel sector is one of the core industries in India which plays a significant role in influence the decision making of all other sectors. Fuel consumption in India has increased by 10.7% to a 16 year high in 2016. Earlier Oil Marketing Companies such as IOCL, BPCL, HPCL, etc. were the market leaders but now these companies are consistently facing challenges from Reliance petrol pump and Essar petrol pump. RIL and Essar have initiated the move of linking petrol and diesel to the market price which was considered a welcome move by all the segments. Metros are seemed to be a lucrative market for the Oil Marketing Companies. The war to capture the metros is heating up among these companies because the dealers can migrate from one company to another company.
How to Open a Petrol Pump in India
Petrol Pump Licensing Procedure –
To promote the transparency in the process of allotting the petrol pump licenses a new eligibility criteria has been formulated. According to the new procedure, the first step is to check the pre-established eligibility criteria if you are fit in these criteria then only you will be selected in the second round. Where a dealer is selected by drawing the lots or a bidding process. That’s why nowadays eligibility criteria play an important role in the selection process.
Eligibility Criteria –
- You have to be an Indian citizen and a resident of India.
- Your age must between 21 to 55 years (Except Freedom Fighters under CC2 category)
- Educational Qualification –
For rural Retail Outlets (ROs) minimum education requirement is 10+2 by a Board / University.
For regular retail outlets, minimum education qualification is Graduation / Chartered Accountant (CA) / Company Secretary (CS), Cost Accountant and Diploma in Engineering
The candidates who are from CC1 and CC2 category minimum education requirement is a 10th class for rural Retail Outlets and 10+2 for regular ROs.
For freedom fighter under the CC2 category, the minimum education norm is not applicable.
Minimum Fund Requirement-
For rural retail outlets minimum fund requirement is 12 lakhs and for regular retail outlets 25 lakhs. The fund can be available in the form of
- Saving accounts, deposit with banks / Registered Company / Postal Scheme
- National saving certificate
- Bonds
- Share of listed companies in Demat account
- Mutual Funds
Only 60% of the value of shares, mutual funds and bonds will be considered for eligibility criteria.
Land Requirement –
The land is an important criteria for selecting petrol pump dealers. You should have a land in the area where the the land can be your own or you can take it for long lease for a minimum time period which is mentioned in the notification. You have to produce different types of documents to prove the ownership of the land.
Regular Retail Outlets- Retail outlets which are on national highways, state highways, urban and semi-urban areas
Rural Retail Outlets – location is in rural areas but not on the national highways or state highways.
License Fee for Petrol Pump –
Currently, the license fee for petrol pump is INR 18/KL for Motor Spirit and INR 16/KL for High-Speed Diesel for dealer owned “B” / “DC” site Retail Outlets and INR 48/KL for Motor Speed and INR 41/KL for High-Speed Diesel for a corporation owned “A” / “CC” site Retail Outlets.
Application Fees for Petrol Pump
The application fee is INR 100/- for rural retail outlets and INR 1000/- for regular retail outlets. SC/ST candidate can get 50% concession on the application fee. You have to pat the application fee in the form of DD. The application fee is non-refundable. One applicant can apply for one location only.
In the case of Dealer Owned / Company leased sites- you have to pay a non-refundable fixed fee of INR 5 lakhs for rural retail outlets and INR 15 lakhs for regular retail outlets.
In the case of Corporation Owned Sites – You have to pay a non-refundable bidding amount of INR 10 lakhs for rural retail outlets and INR 30 lakhs for regular retail outlets.
How to Apply for a Petrol Pump Dealership
Sometimes Oil Marketing Companies publish an advertisement to set up a Petrol Pump on a particular location. If you are eligible you can apply for the petrol pump. You can also submit your application online before the last date. You have to submit the hard copies of required documents. Some companies such as Essar Group, IOC, Hindustan Petroleum etc. has a Retail Outlet Franchisee inquiry form on their official website. Like if you want to apply for an IOC Petrol Pump, anytime you can go to the Official website and fill up the form.
I am providing the list of some official where you can fill the application form-
For IOC Petrol Pump dealership Visit – http://iocl.com/Talktous/Guidelines.aspx
For Essar Petrol Pump Visit – http://www.essar.com/section_level3.aspx?cont_id=tyN/VXziEDc=
For Hindustan Petroleum Visit – http://www.hindustanpetroleum.com/retailpetrolpumpdealership
For Bharat Petroleum Visit- http://www.bharatpetroleum.in/dealer/dealerSection.asp
I have tried to cover all possible and latest information about the petrol pump licensing but sometimes OMCs upgrade their requirements and procedure. So Hope now you are aware about the ” How to Open a Petrol Pump in India”.