Petrol pump business is still one of the most attractive businesses in India. Whether the city or village, the demand for petrol and diesel with the increasing number of vehicles never decreases. But have you ever thought how much it costs to open a petrol pump? And how much commission is available on selling a liter of petrol or diesel? Come, let’s understand the entire mathematics of this business in easy language.

Dream of opening a petrol pump: How much money will be spent?

Starting a petrol pump is not a small task. A huge amount is required for this. If you want to open a petrol pump in the city, then the cost of land price, license fees, and infrastructure can cost from Rs 2 to 5 crore. In rural areas, this cost can be slightly less, ie between 1 to 2 crores. This includes things such as pump machines, tanks, and safety equipment. In addition, you have to get a license from the oil marketing company (eg IOCL, BPCL, or HPCL), for which you may have to pay 25 to 50 lakh rupees separately as security deposits.

How much do pump owners earn on every liter?

Now let’s talk about earning. Petrol pump owners get commission on selling every liter of petrol or diesel. This commission depends on the price of oil and the rules of the oil company. On average, a commission of Rs 3 to 4 on a liter of petrol and Rs 2 to 3 on diesel. If your pump sells 10,000 liters of oil daily, then you can earn from 9 to 12 lakh rupees a month. But out of this, the profit remains 2 to 5 lakh rupees per month after taking out the cost of salary, electricity, and maintenance of employees.

What are the challenges?

The petrol pump business may look beneficial, but the risk in this is also not low. Oil prices fluctuations, paperwork, and rules are not easy to follow. In addition, the location of the pump matters a lot. If your pump is on the highway or in a crowded area, then the earnings will be more. But if the location is not correct, the business may take time to catch speed.

How to start this business?

To start a petrol pump, first you have to apply by visiting the website of the oil marketing company. There are some essential conditions for this, such as your age should be between 21 and 60 years, and you should have 10th or 12th degree. The ownership of land or lease agreement is also necessary. If you want to start this business, do first research and understand local rules.