Petrol Pump License - Eligibility, Procedure, Fees

  • July 08, 2023
  • Dushyant Sharma
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Companies are using dealer selection processes that encourage the regular awarding of licenses. This becomes a new norm that every business owner is following who wants to open a petrol pump. All the candidates fulfilling the required criteria will choose in the next step through a bidding mechanism. 

So, the process of applying for a petrol pump in India is quite easier. First, get registered on the website of Petrol Pump Dealer Chayan. After registering, log in to the portal, select the advertisement, and location. Lastly, fill out the form completely. The time to get the certificate will depend on the errors found in the application. Below check other requirements to get a petrol pump license in India.

Eligibility Criteria for Opening a Petrol Pump

As per the rules of Income Tax, a person who wants to get a petrol pump license must be an Indian citizen and should be qualified to get the petrol pump license. The applicant must stay in India for more than 182 days in a preceding fiscal year to obtain the license.

The age must be between the age of 21 and 60 years. Also, they need to submit a photocopy of these documents:

  • Birth Certificate 
  • Class 12th and 10th School Certificate 
  • Passport
  • Any document that verifies age
  • Voter ID Card 

Educational Qualification

Many people think, that anyone can open a petrol pump who has a good amount of money. But it's not the truth, a person who wants to open a petrol pump and obtain a license must have a license. So, below are the criteria to obtain a petrol pump license.

All the applicants must fulfill a requirement of primary education, SC/ ST/ OBC candidates must complete class 10th, and other candidates must complete class 12th.

Candidate should have a minimum experience of 3 years in any running business, or other related field. Also, they do not have any criminal case record, or not be a defaulter in any business loan.

Land Requirements to Open a Petrol Pump in India

To start a petrol pump in India, there are various requirements which depend on the location and number of dispensing units. The land on which the petrol pump will be built should be registered legally in the name of the applicant and must be free from legal disputes. So, these are the following requirements based on the areas:

Rural Areas: To open a petrol pump in rural areas required 800 square meters for a single dispensing and 1200 square meters for two dispensing units.

Urban Areas: To open a petrol pump in an urban area, 500 square meters are required for a single dispensing unit and 800 for two dispensing units.

National Highways: To open a petrol pump on the national highway, 1200 square meters are required for a single dispensing unit and 2000 square meters for two dispensing units. 

Installation Cost of a Petrol Pump

To install a petrol pump in India, the cost of installation will depend on the following factors: Construction cost, Equipment cost, and Licensing fees. A further breakdown of the cost required to install a petrol pump in India is as follows:

Land Cost: The cost will depend on the location and size of the area required. The cost may range from Rs. 20 lakhs to Rs. 1 crore.

Construction Cost: The construction of cost will depend on the design of the petrol pump, the material used, and lastly the size. Construction can cost somewhere between Rs. 30 lakhs to Rs. 1 crore.

Equipment Cost: Equipment includes fuel dispensing units, storage tanks, and other equipment to run a petrol pump successfully. It can cost between Rs. 20 lakhs to Rs. 50 lakhs.

Licensing Fees

The licensing fee of Rs. 12 lakhs is the minimum to start a petrol pump station in a rural area and Rs. 25 lakhs to open a standard petrol pump. The investment funds can be in the following format: 

  • Savings in Banks/ Postal Schemes/ Registered Companies
  • Bonds/ Shares of listed companies
  • Mutual Funds
  • National Saving Certificates

However, money, jewelry, or any other thing whose existence can’t be proved will not be considered. The current account balance will also not be considered. Other than this, 60% of total value of the shares, all investment schemes, and notes will be considered.

Ask your CA for the investment assessment certificate, which is an investment in a petrol pump. The licensing fees include obtaining permits, licenses, and different approvals from government authorities. It can cost Rs. 2 lakhs to Rs. 5 lakhs.

Procedure to Apply for the Petrol Pump License

The process of obtaining a petrol pump license in India hardly takes 2 days to complete. First, the candidate must visit the official website of Oil Marketing Companies or check the newspaper consistently to get updates about the installation of different gas stations in various places. Below is the process to obtain a petrol pump license:

Step 1: First register on the web portal of Petrol Pump Dealer Chayan portal.

Step 2: Log in to the portal, and select the advertisement.

Step 3: Choose the location to apply, and fill out the application form. Pay online payment, without payment, the application will not proceed and get rejected.

Some famous Oil Marketing Companies are Bharat Petroleum Corp. Ltd., Hindustan Petroleum Corp. Ltd., Indian Oil Corp, etc.

Conclusion

As mentioned above, starting a petrol pump in India is quite easier but required a good amount of investment to set up and run this business. Once the applicant fulfills all the requirements, the next step is chosen through a lottery or bidding procedure.


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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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