What is the Complete Process to open a Petrol Pump in India?

Petrol Pump operation is considered one of the most lucrative businesses in India. But many people don't know the process to get the petrol pump in India. In this article, we have explained the complete process regarding the same.
Jan 3, 2020 15:45 IST
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Process to open Petrol Pump
Process to open Petrol Pump

As per news reports, India has around 64,624 petrol pumps in India. In addition to these petrol pumps, 3 public sector oil marketing firms namely; Bharat Petroleum Corp Ltd (BPCL), Hindustan Petroleum Corp Ltd (HPCL) and Indian Oil Corp (IOC) have advertised to open 78,493 more petrol pumps in India in November 2019.

So it is expected that in the year 2020, there are many opportunities to open petrol pumps in India. In the absence of accurate information, many people don't know the process to open the petrol pump in the country.

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Now the government is striving hard to ensure transparency in the allocation of the petrol pumps in the country.

As per the new rules; if an applicant passes the first stage of prefixed criteria then he/she will get the chance to participate in the second stage of allocation.

So let us know what is the criteria for each stage separately?

The First Step of the process: Eligibility Criteria:-

1. The applicant must be an Indian citizen and if he/she is Non-Resident Indian i.e. NRI then he must live in India for at least 180 days before applying for a petrol pump or retail outlet.

2. The age of the applicant should be between 21 to 55 years (some relaxation for freedom fighters’ family).

3. The applicant shall enclose a photocopy of the 10th mark sheet as the proof of date of birth.

4. The applicant of the SC / ST / OBC category shall be 10th pass while for the general category he/she must be 12th pass.

5. Applicant must be graduate if he/she wants to open a petrol pump in urban areas. 

6.  The criteria of minimum qualification is not applicable in the case of freedom fighters.

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Second Step of the process;

If somebody gets clearance in the first stage then he/she enters the second stage.
Minimum Fund requirement;

Exact expenditure on petrol pump opening can’t be the same throughout the country. But generally, the applicant will have to spend minimum Rs 15 to 20 lacs to open a petrol pump in rural areas while for urban areas this cost may be around Rs 30 to 35 lacs.

At the same time, it should also be kept in mind that these rupees should be in this form; Apart from Jewellery and cash, the money can be in the form of;

1. Mutual Funds

2. Bonds

3. Saving accounts, deposits with banks / Postal Scheme/Registered Company

4. National Saving Certificates

5. Share of listed companies in Demat account

Land Requirement for Petrol Pump:-

The applicant should have landed in the concerned area or he/she can take it on lease for a minimum time period ( as mentioned in the notification). 

Note: The applicant has to produce some documents to prove the ownership of the land.

The location of the petrol pump is very crucial for oil marketing companies. Companies prefer the place which is near residential locality, busy market areas or on the state/national highway because companies want to increase the sale.

Normally, the area of 800 square meters to 1200 square meters is sufficient to open a petrol pump.

Application Fees for Petrol Pump

The application fee is Rs.1000/- for regular retail outlets and Rs.100/- for rural retail. The applicants belonging to SC/ST categories can get a 50% concession on the application fee.

The application fee is Rs.100 for petrol pumps in rural areas while Rs 1000/- for other retail outlets.

Note: The applicant can apply only for one location I.e. either rural or urban area.
Fixed fee for retail outlets:- 

In case the applicant owns land in the concerned area then he/she has to pay Rs.5 lakhs for rural retail outlet and Rs.15 lakhs for a regular retail outlet. This fee is non-refundable for both locations.

How to Apply for a Petrol Pump Dealership:-

Generally, the Oil Marketing Companies  (OMCs)give advertisements in the newspaper or its website to set up petrol pumps at various locations in the country.

Interested candidates can apply online for a license to open a petrol pump in the desired state/city/region.

If the oil marketing company receives a large number of applications, then it announces the name of the winner through the lottery system. The winners of the lottery have to submit the related documents with the oil company.

Note: After getting the license of Petrol Pump, the applicant will have to get the GSTIN number to pay GST and open a current account in the name of his petrol pump.

So in this way you read that the applicant has to go through a very complex process to get the license of Petrol Pump. If an applicant becomes eligible for the petrol pump then he needs a lot of money which is not an easy task for every person. But if the applicant gets the license; it’s a win-win situation for the coming generations too.

Note: Information given in the article is subject to change as per the latest policy of the oil marketing companies.

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