How To Open a Petrol Pump in India? Process to Get Fuel Station Dealership

Vipul Das

Operating a petrol pump is one of the leading business projects at the moment. There are many concerns such as expenses to operate a fuel station, the license approval process, land specifications, etc. Numerous oil firms, such as Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL), Indian Oil (IOCL), Essar Oil or any other oil company, offer their dealership to the interested folks. Therefore, several prospects for the opening of petroleum pumps in India are expected in 2020. Several people do not know how to open the petrol pump in the nation or respective state, because they do not have accurate information.

A new dealer selection process has been introduced in order to promote consistency in the grant of a license for petrol pumps and franchises by Oil Marketing Companies. In the new protocol, the candidate is first tested against the pre-established eligibility criteria. All candidates who meet the standard for eligibility will be assigned for the next round, in which lot is drawn or the dealer is selected through an auction process. The eligibility criteria therefore now play a crucial role to open a Petrol Pump in India. Scroll down and get to know about all the process and eligibility to be a Petrol Pump Dealer.

Eligibility Criteria

- Applicant must be an Indian Citizen

- In case of NRI- He/She must live at least 180 days in India before applying for a petroleum pump or retail outlet.

- Applicant must have a minimum age limit of 21 years to a maximum of 55 years.

- To set up Petrol Pump in a rural area, the applicant must have a valid 10th mark sheet proof for verification of date of birth.

- SC / ST / OBC applicants must be the 10th pass, whereas it must be the 12th pass for the general category.

- To set-up a Petrol Pump in an urban area- Applicant must have passed Graduation/ Chartered Accountant/ Company Secretary/ Cost Accountant/ Diploma in Engineering.

- For C1 and C2 category- Applicant must have a minimum qualification of 10th+2.

Fund Requirement to Set-up an Oil Firm in India

The minimum amount of Rs 12,00,000 and Rs 25,00,000 is needed for rural dealerships and standard dealerships. However, as per the regulations, the appropriate fund or deposit may be in the form of savings accounts, bank / registered companies / postal schemes or bonds or securities of listed companies in de-mat type or mutual funds or national savings certificates, etc. Eligibility criteria are considered only for 60% of the value of shares, mutual funds and bonds.

Requirement of land to set-up an oil firm in India

After clearing the above procedure, the land requirement is the most major part of petrol pump dealership procedure. If you do not have any land on your behalf, you can also take land in lease. You must obtain a No Objection Certificate(NOC) from the landowner for the same.

To set-up an oil pump in Rural Area- The land must be in rural areas but not on the national highways or state highways.

To set-up an oil pump in Regular Area- The land must be on national highways, state highways, urban and semi-urban areas.

If the land approved on behalf of the applicant then he/she is required to provide a retaining wall and compound wall of a minimum height of 1.5 meters, designed as per site conditions.

Application Charges

The application fee is Rs.1000/- for regular retail outlets and Rs.100/- for rural retail outlets. Applicants from the SC / ST category can get a 50% waiver on the application fee.

The application fees are to be paid in favour of a specific Oil Company through Demand Draft (DD).

For Dealer Owned / Company leased locations, a fee of Rs. 5,000,000 is charged for rural dealerships and Rs. 15,000,000 must be paid for urban dealerships. In the case of Corporation owned sites which require bidding for allotment, bidding sums of Rs. 10.00 000 and Rs. 30.00 000 shall apply to rural dealers and daily dealerships.

License Fee

Rs. 18/KL for Motor Spirit (MS) and Rs.16/KL for High-Speed Diesel (HSD) 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 the license fee for a petrol pump dealer.

How to apply for Petrol Pump Dealership in India?

In general, the Oil Marketing Companies (OMCs) publish an advertisement in the newspaper or its website to set up petrol pumps at different locations across the country. Many oil firms such as Essar Group, IOC, Hindustan Petroleum etc. have an application form on their official website for the Retail Outlet Franchisee. If a large number of applications are received by the oil marketing company then a lottery system is initiated to select the applicant. The selected applicant must submit the related documents to the oil company in the given time period. The applicant will have to obtain the GSTIN number to pay GST and open a current account on behalf of his petrol pump after receiving the license.

Apart from the above procedure applicant can apply online through the below-given procedure.

1. Visit the site petrolpumpdealerchayan

2. Click on Register Now, which is located on the homepage

3. Fill the form and create an account for the further process.

4. Login with your Id and Password and click on Available Advertisement, which is located on the dashboard.

5. Now select your desired company name and your resident state.

6. Now you will see the place in which the company wants to open the petrol pump in your selected state.

7. Choose your nearby area and click on Apply Now

8. Now fill the form in the given time limit of 40 mins

9. Select Individual or Partnership from the drop-down box and pay a fee of Rs 10,000.

10. Now fill your personal and mandated details, upload your photo and signature and click on Submit.

11. Now you will be redirected to the payment getaway, where you have to pay the fee to complete the process.

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