Small-Town Business Ideas You Can Start Today
Estimated Cost to Open a Gas Station in a Village
Generally, the initial investment to open a petrol pump in a rural area can range from ₹15 lakh to ₹20 lakh, assuming you own the land. If you need to lease or purchase land, the cost can significantly increase, potentially reaching ₹40-50 lakh or more.
This cost typically covers:
Land Cost: This is the largest expense if you’re purchasing land. Even leasing land can involve a substantial upfront payment.
Licenses and Permits: Fees for obtaining various government licenses and permits. Application fees for rural areas are usually lower (e.g., ₹100 to ₹1,000).
Fixed Fees / Security Deposit: An amount paid to the oil companies as a fixed fee or security deposit. For rural outlets, this could be ₹5 lakh to ₹12 lakh, and for company-owned dealerships, it might be around ₹10 lakh.
Infrastructure Development: Construction of the office, store room, restrooms, electrical connections, water supply, boundary wall, canopy, and driveway.
Equipment: The cost of purchasing fuel dispensers (pump machines), underground storage tanks, air filling machines, generator sets, and other necessary equipment.
Working Capital: Funds required for the initial fuel stock, employee salaries, and day-to-day operational expenses.
Earning Potential
The income from a petrol pump depends on the commission earned per liter of petrol and diesel sold. Typically, you can earn a commission of ₹2 to ₹5 per liter. If you sell 5,000 liters of fuel daily, your gross daily income could be ₹10,000 to ₹15,000, with a potential net profit of up to ₹10,000 per day after expenses.
Other Important Considerations
Eligibility: You typically need to be between 21 and 60 years old and have at least a 10th-grade education. Some companies might require a 12th-grade qualification or a graduation degree.
Land Requirement: In rural areas, approximately 1200 to 1600 square meters of land is generally required.
Financial Capability: You must demonstrate sufficient funds for the required investment, which can include bank deposits, bonds, shares, fixed deposits, mutual funds, etc.
Application Process: Oil marketing companies (Indian Oil, BPCL, HPCL) publish advertisements for dealerships on their websites and in newspapers. You need to apply online.
Bank Loans: Banks can provide loans of up to ₹2 crore for starting a petrol pump business.
Starting a petrol pump business can be a profitable venture, but it requires significant initial investment and adherence to various regulatory requirements.