How to get a Petrol Pump License? Eligibility Criteria and Petrol pump License cost in India

Dreaming of opening a petrol pump business? Don’t worry, this article will guide you with all the information on the petrol pump license cost in India, including how to apply for a petrol pump license and how to get a petrol pump license in India.

Introduction

A new method for selecting dealers has been created to make the process of issuing petrol pump licenses and franchises by Oil Marketing Companies more transparent. In this new procedure, candidates are first assessed against pre-set qualifying requirements, including the petrol pump license cost. Those who meet the eligibility criteria move on to the next stage, where dealers are chosen either by a lottery or a bidding process. Thus, meeting the eligibility criteria, including the petrol pump license cost, is now crucial for becoming a petrol pump dealer.

Eligibility Criteria for Obtaining a Petrol Pump License

The following are the eligibility conditions that must be met in order to obtain a gasoline pump license:

• The individual must be an Indian citizen.

• The applicant must be a resident of India, i.e., he must have spent more than 182 days in India in the previous financial year.

• The applicant must be between the ages of 21 and 58.

• Applicants who fall into the category of freedom fighters are excluded.

• A document proving your identification is required.

• The applicant’s age should be verified by presenting a copy of his or her 10th Matric Certificate, Secondary School-Leaving Certificate, Passport, Birth Certificate, Affidavit for Age Proof, or Election Commission Identification Card.

Petrol Pump Cost and Requirement for Operation

Operating a petrol pump business in India requires obtaining the appropriate licenses and paying various fees:

1. License Requirement

 An applicant must obtain a license to operate a petrol pump in India.

2. Cost of License:

 The license cost varies based on the type of fuel sold at the petrol pump.

 Typically, a license for diesel is less expensive than one for petrol.

3. Additional Fuel Licenses

 Separate licenses are required to add alternative fuels like CNG or LPG to the petrol pump’s offerings.

4. State-wise Variation:

 The cost of the license can differ from one state to another.

5. Application Fees:

 The application fee is around Rs. 1000 for urban retail outlets and Rs. 100 for rural outlets.

6. Discounts for Reserved Categories:

 Applicants from SC/ST/OBC categories are eligible for a 50% discount on the application fees.

7. Fixed Fees:

  There is a non-refundable fixed fee required to operate a petrol pump.

For owned land: Rs. 15 lakhs for regular retail outlets and Rs. 5 lakhs for rural retail outlets.

For company-owned dealerships: Rs. 30 lakhs for regular retail outlets and Rs. 10 lakhs for rural retail outlets.

8. Non-refundable Fees:

All fees, including the license fee, application fee, and fixed fee, are non-refundable.

These requirements and fees ensure that applicants are aware of the financial commitments and regulatory obligations involved in running a petrol pump in India.

How to apply for Petrol Pump License?

In general, Oil Marketing Companies (OMCs) advertise in the newspaper or on their website that they are setting up petrol stations in various locations across the country. Many oil companies, such as IOC,  Essar Group, Hindustan Petroleum, and others, feature an application form for Retail Outlet Franchisee on their official websites. If the oil marketing company receives a significant number of applications, a lottery technique is used to pick the applicant. The chosen candidate must provide all required documentation to the oil business within the specified time frame. After getting the license, the applicant must receive a GSTIN number in order to pay GST (Goods and Service Tax) and open a current account on behalf of his petrol station.

Petrol pump license cost in India

The cost of obtaining a license for a petrol pump in India varies depending on the state and location. Generally, the cost can range from a few lakhs to several crores. It is recommended to check with the concerned authorities in your state or location to get an accurate estimate of the license cost.

In addition to the preceding approach, applicants can apply online using the steps outlined below:

• Login to the Website Petrol Pump Dealer Chayan.

• Click on the Register now button.

• Add all the necessary information and create an account.

• After that log in with the ID and Password, and Click on the Available Advertisement.

• Choose your desired company and a state where you want to operate.

• All the information related to a company and selective area will be seen in Your website.

• Select your preferable area and Click on Apply now.

• Fill all the necessary information within a time limit.

• Choose a partnership firm or Individual from the dropdown box and pay a fee.

• Enter your personal details with a Photo and Signature.

• Click on Submit and pay the required fee.

Investment needed to get a Petrol Pump License in India

To open a petrol station, the applicant must be able to invest a minimum of Rs.25 lakhs in normal gas stations and Rs.12 lakhs in rural petrol stations. The investment funds might take the following forms:

• Funds in savings accounts, postal scheme deposits/bank/registered company

• Bonds

• Certificates of Deposit

• Demat Form Shares of Listed Companies

• Mutual Funds

It is worth noting that jewelry, cash, and other items for which ownership cannot be verified will be ignored. In addition, the current account balance will not be taken into consideration. Only 60% of the mutual funds, value of stocks, and bonds will be evaluated. An entity needs to obtain a Chartered Accountant’s value certificate for the assets.

Land needed for a petrol station

The location of a petrol pump is a crucial criterion in choosing a dealer. First, the applications are divided into two categories:

• The land should be located on the National Highway.

• Applicants who own or have a long-term lease on a suitable piece of land in the listed location/area.

• Applicants who have a firm offer on a suitable piece of land to buy or lease for a long period of time.

Different sorts of documentation must be submitted by the applicant to prove ownership of the Land or intent to purchase based on the categories described above. The land acreage must meet the specifications specified in the advertisement. If the applicant is chosen for a fuel pump dealership, he or she must develop the supplied land up to the road level by filing/cutting with good earth and compacting layer-by-layer as per established engineering methods. The chosen applicant must deliver a retaining wall and compound wall with a minimum height of 1.5 metres that are built to meet the site’s requirements.

Permissions and Certificates Required for starting a Petrol Pump Business

To open a petrol station, an applicant must receive specific certificates and authorization in order to run his or her business smoothly. Here are a few examples:

• No Objection Certificate (NOC) from the Licensing Authority

• Permission from the Municipal Corporation Department

• Fire Safety Office Certification and NOC from connected authorities

Conclusion

The location of a petrol station is critical to a company’s success or failure. Petrol stations should be located near busy national or state highways, residential neighborhoods, prominent marketplaces, and high-traffic roadways. The applicant must understand the petrol pump license cost and build a petrol pump and oil bunkers in accordance with the OMC’s requirements and instructions after receiving the license.

Suggested Read: Indian Oil Startup Fund

FAQS on Petrol Pump License in India

1. How can I obtain a license to operate a gas station?

State authority can get a license to own and operate a petrol pump based on the location of the petrol pump and approval from the Municipal Corporation Department of that particular state, along with NOCs and a copy of the location’s certificate.

2. If I want to set up a Petrol Pump in Maharastra, How much will it cost?

To open a petrol station, the applicant must be able to invest a minimum of Rs. 25 lakhs in standard petrol stations and Rs. 12 lakhs in rural petrol stations.

3. Is it possible to modify information supplied in the online application form for a RO dealership?

Only up to the point before final submission of the application form, that is until the user clicks the Submit and Proceed button in the system, may the information submitted in the online format be updated.

4. What is the best way for me to establish a petrol pump business in India?

Ans. To open a fuel station in India, a business owner must meet the state’s eligibility requirements, which include demonstrating working capital, being between the ages of 21 and 55, and having completed at least the XII level in studies.