How to Start Petrol Pump Business in Rural Areas

Most vehicles need petrol to run. Without it, they will not function. So it doesn’t come as a surprise that the petrol business is one the most profiting businesses not just in India but across the globe. It is ever-growing as people need some form of transport to travel to places and their private vehicles for it.

The fact that every middle-class family has at least one vehicle of their own contributes to this booming business. Everyone needs petrol and since the fuel prices are touching the sky right now, it wouldn’t harm to own a petrol pump, wouldn’t it?

But how to go forward with it? There has to be a process that one has to follow to start a business, right? Well, worry not because this article entails the full process of how one can own their own petrol pump.

Eligibility Criteria

• The person must be a citizen of India. In the case of an NRI applicant, the person must have lived in India for more than 182 days.

• The person should fall under the age bracket of 21 years to 55 years.

• For obtaining a petrol pump in the urban areas, the person must be a college graduate from an institute recognized by the UGC.

• For a rural area, the applicant must have completed their 10 + 2.

• For applicants belonging to the CC1 category a 10th standard certificate is mandatory, while for people belonging to the CC2 category they must hold the 10 + 2 certificate.

• If the applicant belongs to the freedom fighter category, the rules aren’t applicable to them

• To obtain leadership in rural areas a minimum investment of 15 lakhs INR is required.

• A minimum investment of Rs. 2 crores is required to acquire leadership in urban areas.

• The area that the applicant wants petrol pump leadership over, shouldn’t fall under any excluded or blacklisted zone.

Land Requirement

• The land must either be owned by the applicant or should be leased by them for the time period agreed upon by the oil company.

• If the land is leased, the applicant must provide a No Objective Certificate from the owner.

• The application should make sure that all the legal formalities are completed and the applicant has all the documents ready with them for the verification process.

• The area of land should be at least between 800m2 to 2000m2 depending on the area.

• The land should be plain and properly leveled.

• The land should have easy access to the community and hence have proper roads to and from it.

Retail Outlets

The petrol pump Retail Outlets (RO) are divided into 2 different categories. Lands that are close to the National highways are considered Urban RO or Semi-Urban RO. These outlets are called Regular Retail Outlets. The lands that are nowhere near the National Highways are considered Urban ROs. These outlets are called Rural Retail Outlets. Irrespectively, the lands are specified in the advertisements posted by Oil Marketing Companies (OMCs).

Once you have gained the license, you might need to make some constructional changes to the land by creating a compound wall, proper entry and exit for vehicles, etc.

Investment & Fees

• The minimum investment required to open a petrol pump in a rural area is Rs.12 lakhs.

• The minimum investment for an urban area is Rs.20 lakhs.

• The figures given above aren’t absolute and may vary from company to company.

• The investment by the applicant will be accepted in the form of funds in a Saving Account, Bonds, Mutual Funds, Shares (of which 60% will be considered), and a National Savings Certificate.

• The investment however won’t be accepted in the form of jewelry, cash, material assets (like house, car, etc.), and funds in a current account.

Apply for the License

Once you have secured the land and the investment amount, you can apply for obtaining the license required to open your petrol pump. For this, the OMCs give out advertisements on their official websites or in local and state newspapers. The candidates interested in the following have to:

Step 1: Buy a form of Rs.100 for rural areas or Rs.1000 for urban areas.

Step 2: Fill in the accurate details

Step 3: Upload the required documents on the OMCs official website.

Step 4: If the applicant is chosen, he must then get a GSTIN number to pay GST.

Step 5: The applicant will also have to open a current account in the name of his petrol pump.

Obtaining Certificates

Once the license is sanctioned, the applicant will first have to gain certificates and permissions from different authorities, before actually creating the infrastructure and registering for GSTIN. There are 4 certificates/permissions, without which the applicant won’t be able to operate the petrol pump. They are:

1. Permission letter from the Municipal Corporation.

2. Permission letter from the Fire Safety Office

3. NOC from the Licensing Company and other concerned authorities.

4. Location Certificate

Conclusion

Although OMCs frequently post ads looking for lands and/or dealers to open a retail outlet, it would be best if you visit the official websites of the OMC to make sure of the availability of land and the opening for a retail owner.

You can’t be very choosy in this business, as most of the time, you will have limited options in an area of your preference as it is highly unlikely that two different OMCs have their outlets in the same area.

The official websites of the OMCs have all the required details and guidelines to apply for Petrol Pump ownership. The guidelines may vary from location to location, state to state, etc. most of the time, a different link is produced for a new location to make it easier for the applicants. These links are posted on the OMC website itself.