The petrol pump business has always been considered a major profit business, not only in India but globally as well. This is largely due to the ever-increasing growth and consequent demands of the transport and logistics sector. Another obvious reason is the growing need for everyday travel of the common man. Moreover, nowadays, it has almost become a necessity for a middle-class person to own a vehicle to ensure their comfort and convenience in everyday life.
The gas pump business is a profitable business in India for those who have good ownership on highways or busy roads. The number of vehicles in India is increasing day by day due to infrastructure improvements, increased demand for gasoline and gas pumps. In recent years, gas stations have also diversified their operations and now offer a range of services to increase profitability. Most gas stations now also include a restaurant or rest area, with additional income.
Therefore, choosing to start your own gas pump business is a feasible option in today's times. Even though it requires quite a bit of legal obligations and paperwork, it is still among the most profitable companies in India. Additionally, Oil Marketing Companies (OMCs) aim to get more profitable opportunities to encourage the expansion of India's gasoline pump business in 2020-2021.
In order to promote transparency in the granting of petrol pump licenses and franchises by oil marketing companies, a new dealer selection process has been formulated. Under the new process, the applicant is first checked against pre-established eligibility criteria. All candidates who meet the eligibility criteria are selected for the next round, where they are drawn by lot or a bidding process is used to select the reseller. Therefore, eligibility criteria now play an important role in determining the petrol pump dealer.
ELIGIBILITY CRITERIA FOR PETROL PUMP BUSINESS
1. The owners/owners of the gas pump business should be citizens of India. In the case of an NRI applicant, he must have lived in India for more than 182 days.
2. The minimum age limit of the applicant must be 21 years and the maximum age limit must not exceed 55 years.
3. For an individual residing in rural areas, the minimum qualification required is a 10 + 2 certification. And, for people residing in urban areas, the minimum educational qualification should be a degree certification from a university recognized by the UGC. For candidates belonging to category CC1 a 10th certificate is required and for category CC2 a 10 + 2 certificate is required.
4. Candidates belonging to the category of freedom fighters are exempted from the regulation.
5. A minimum investment of Rs 15 lakh or more is required to obtain a dealership in rural areas.
6. Minimum investment of Rs 2 crore or more to get a dealership in urban areas.
7. The owners/owners of the gas pump business should be citizens of India. In the case of an NRI applicant, he must have lived in India for more than 182 days.
- The land is an important criterion in the selection of gasoline pump dealers. Candidates are first classified into two groups as follows:
1. Land should be on the National Highway
2. Applicants who have suitable land in the advertised location/area either by way of long-term property/lease.
- Applicants who have a fixed offer for a piece of land suitable for long-term purchase or lease.
Based on the aforementioned classification, the applicant must submit different types of documents to prove ownership of the Land or intention to purchase. The land area must comply with the requirements specified in the announcement. If the candidate is selected for the gasoline dealership, he must provide the land offered in a developed manner up to street level by cutting/backfilling, with good soil, compacted in layers according to normal engineering practices. The selected candidate requests to provide a retaining wall and a compound wall with a minimum height of 1.5 meters, designed according to the conditions of the site.
The above are some of the main criteria for providing the gas pump license. Applicants who meet these criteria will be allowed to move on to the next stage, where the final decision is made on the basis of a draw or bidding process.
To open a gas pump business, you need to have good investment skills, to begin with. There are two types of expenses for opening gas stations in India:
· Rs 12 lakh for RO for rural areas and Rs 25 lakh for RO in urban areas, although the amount can vary from company to company.
· Your funds will be accepted in the following ways:
- National savings securities
- Shares of companies listed in Demat Form
- Mutual funds
- Savings account funds
- bank deposits
· Cash, jewelry, current account balance will not be considered for investments in this business.
APPLICATION FOR LICENSE
To obtain a license to open a gas pump. For this, the Oil Marketing Companies (OMCs) place advertisements on their official website or in newspapers to install gas pumps in different places. Interested candidates must:
- Purchase a form online for Rs 100 (rural areas) and Rs 1000 (urban areas) and duly fill inaccurate details such as personal ID, identification sheets, terrain details and upload the required documents on the chosen oil company website.
- Once licensed, the applicant will need to obtain a GSTIN number to pay for GST and open a checking account with the name of his or her gas station.
Once the license has been approved, the next step will be to obtain certain certificates and authorizations before building the gas pump infrastructure:
· Authorization from the municipal authority and the fire safety office
· NOC from licensing and other relevant authorities
· Position certificate (Location certificate)
The gas pump business is long-term in nature and involves significant capital investments, licensing deals, and high revenues. Hence, a limited liability company is the ideal business entity to start and operate a gas pump. The indebtedness company would make sure that the investment within the gasoline pump, the trouble to get a license, etc., from the promoters, are easily transferable to a different person, in the event of an exit. On the other hand, gas pumps started as ownership or partnership would involve extensive legal formalities and complications in terms of ownership transfer. It is more ideal if the ownership of the land, the license to work a petroleum pump, etc., are held within the same company. However, in many cases, ownership of the land is retained in the name of the promoter, while the operations and licenses are retained in the name of the company.