How to open petrol pump – eligibility, investment? – Startup Ideas

How to open petrol pump - eligibility, investment, requirements? – Startup Ideas

A new dealer selection process was formulated to promote transparency in the awarding of petrol pump license and franchise by Oil Marketing Companies. The applicant is first verified according to a pre-established eligibility criteria under the new process. For the next round, all applicants who meet the eligibility criteria are selected, where lots are drawn or the dealer is selected through a bidding process. In determining the petrol pump dealer, therefore, eligibility criteria now play an important role. We publish detailed information on the whole process of opening new petrol pumps in India in this article.


Eligibility criteria for opening a petrol pump:-

      1)      The applicant must include a photocopy of the 10th mark sheet in order to provide the correct proof of age.
      2)      The applicant’s age should range from 21 to 55 years (applicants are exempted from the category of freedom fighters).
      3)      The applicant must be an Indian citizen, i.e. if he / she is an Indian non-resident. NRI then has to live for at least 180 days in India.
      4)      If a applicant resides in the village and belongs to the SC / ST / OBC category then it is necessary to be the 10th pass, but the general category applicants must be the 12th pass.
      5)      If someone wants to open the petrol pump in urban areas, they should be graduate.
      6)      The minimum qualification criteria are not applicable in the case of freedom fighters.

Investment required for opening a petrol pump:-

The applicant must demonstrate the ability to invest at least Rs.25 lakhs in regular petrol pumps and Rs.12 lakhs in rural petrol pumps in order to start a petrol pump. Investment funds may be available in the following forms:
      1) Funds in savings accounts, bank / registered company / postal deposits, schemes certificates of national savings, etc.
      2) Shares in the Demat form of listed companies.
      3) Bonds
      4) Mutual funds
It is important not to consider that cash, jewelry, etc. for which ownership can not be established will not be considered. For eligibility criteria, only 60 percent of the value of Mutual Funds, bonds and shares will be considered.

Land required for opening a petrol pump:-

Land is a major criterion in petrol pump dealer selection. First, the applicants are classified as follows into two groups:-
      1) Land should be on the national highway road.
      2) Applicants with appropriate land in the advertised location / area either through ownership / long-term lease.
      3) Applicants having a firm offer to buy or lease a suitable piece of land for long term.
Based on the above classification, the applicant must submit various types of documents to prove ownership of the Land or purchase intention. The land area must be as per the advertisement requirements. If the applicant is selected for a petrol pump dealer, by cutting / filling, with good earth, layer-wise compacted as per standard engineering practices, he / she must make available the offered land in a developed manner up to road level. The applicant selected is also required to provide a minimum height of 1.5 meters retaining wall and compound wall designed according to site conditions. 

License and application fees for petrol pump:-

Rs. 18/KL for Motor Spirit and Rs.16/KL for High-Speed Diesel for dealer owned “B”/”DC” site Retail Outlets and Rs.48/KL for Motor Speed and Rs.41/KL for High-Speed Diesel for a company owned “A”/”CC” site Retail Outlets are currently the license fee for petrol pumps. 

Application fees structure:-

1)      For regular retail outlets, the application fee is Rs.1000/- and Rs.100/- for rural retail. In the application fee, applicants belonging to SC / ST categories can receive a 50 percent concession.
      2)      The applicant must pay the application fee by drafting the application. The application fee can not be reimbursed. Only one applicant can apply for one location.
      3)      The applicants must pay a non-refundable fixed fee of Rs.15 lakhs for regular retail outlets and Rs.5 lakhs for rural retail outlets if land is owned by the dealer.