What Is The Petrol Pump Franchise Cost In India?

The Petrol Pump business is evergreen in India. It is profit-making, and you will never run out of customers. The demand for fuel is always on the rise. We are sure that at one point in time, you would have thought about opening a petrol pump franchise. It is certainly possible, and today, we will talk about the cost associated with the petrol pump franchise in India.

Cost of Petrol Pump Franchise in India

Petrol Pump

The cost of a petrol pump depends on the area you are opening in. There is an initial fee associated with the petrol pump. For the rural area, you need about Rs 15 Lakh to RS 20 Lakh, whereas for opening a petrol pump in an urban area, you would need Rs 20 Lakh to Rs 25 Lakh. Here, we are not factoring in the land cost and assuming that you already own the land. Moreover, we don’t recommend opting for the leasing option here since you will incur a huge cost on the infrastructure set-up. In such a case, it is always better to opt for such heavy investments in owned land. We have given an estimated cost for other overheads below.

  • Land Cost – Rs 20 Lakh to Rs 2 Crore
  • Construction Cost – Rs 30 Lakh to Rs 1 Crore
  • Equipment Cost – Rs 20 Lakh to Rs 50 Lakh
  • License Fee – Rs 2 Lakh to Rs 5 Lakh

Eligibility Criteria for Petrol Pump Franchise in India

Below are the eligibility criteria for opening a petrol pump franchise in India.

  • The applicant should be older than 21 years old, and the applicant should not be older than 55 years.
  • The applicant should have completed the SSC from a recognized board.
  • The applicant should have a minimum working experience of 3 years at a business or a retail outlet.
  • The applicant’s net worth should be over Rs 25 Lakh, and the applicant’s family net worth should be over Rs 50 Lakh.
  • The applicant should not have a criminal record and should have never defaulted on a loan.

Space Requirement for Petrol Pump Franchise in India

Like the minimum investment, the land requirement for a petrol pump also depends on the area where you are opening the petrol pump. If you are opening a petrol pump in a rural area, then you would need 800 sq. meters for a single dispensing unit and a 1200 sq. meter area for a pump with two dispensing areas. Similarly, if you are opening a petrol pump in an urban area, you would need 500 sq. meters for a single dispensing unit petrol pump and 800 sq. meters for two dispensing unit petrol pumps. The space requirement for national highways is a little higher. You need 1200 sq. meters for the single dispensing unit and 2000 sq. meters for the two dispensing unit petrol pump.

How to Apply for Petrol Pump Franchise?

You would need to watch the advertisements in newspapers released by the petrol pump companies offering licenses. Once you see the advertisement, you will know which company you can collaborate with for opening the petrol pump. These advertisements are typically published in newspapers and on the Internet. You can visit the official website of Oil Marketing companies to check out the advertisement and other information. The detailed procedure is listed in the advertisement, along with the requirements and the fee. You would need to follow the exact procedure. There are some variables in the process, and those are clarified in the advertisements.

Once you fill out the form and submit it, the company goes through the details, and they will also help you obtain the certificates required to open the petrol pump. In addition, you may need a business loan for the working capital since you need to maintain the stock for the fuel. Some popular Oil Marketing companies in India are Bharat Petroleum, Essar Oil, Indian Oil, Hindustan Petroleum, Indraprastha Gas, Reliance Petroleum and Shell India Private Limited.

Final Take

The petrol pump business is certainly one of the most lucrative businesses in India. The game is all about economies of scale. In addition, you can start offering add-on services like engine oil changes, car wash and other similar services. This will make your business even more profitable. Such add-on services can contribute a lot to your revenues.

Note: The cost is mentioned here might be vary due to some changes in policies or recent business updates. So, please confirm from the official website before applying.

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Sumit Kumar Yadav has experience analyzing business and finance of big to small companies. Loan, Insurance, Investment data analysis are his key areas.