What is Petrol Pump License?
Petrol Pump is considered one of the best business ventures and also as one of the most profitable business in India, however to start the petrol pump venture is not as easy as it looks mainly because getting a petrol pump license in India is not an easy process. One has to comply with lot of guidelines and formalities and it is important to understand it all before venturing in the petrol pump business.
As per the 2016 statistics, India has approximately 60,000 petrol pump installations, out of which approximately 25,000 belong to Indian Oil Corporation (IOCL) and 13,000 each to Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) and the consumption of fuel has increased by 10.7% to an every high of 16% in the year 2016. Also fuel sector is one of the core industries in India and is one of a vital factor to be considered in decision making of all other sectors.
With the entry of private firms such as Reliance Petrol Pump and Essar Petrol Pump, the competition has increased multifold mainly because these firms have taken an initiative to link the petrol and diesel price to the market price, which was welcomed by all the segments. However, Indian government has always been committed to promote transparency in the process of allotting the petrol pump license and has formulated new procedure according to which you will be called for the second round of the selection process only if you are fit in the pre-established eligibility criteria and thus the entire selection process has been divided into first and second phase, such as:
The First Step of the Process: Eligibility Criteria
As per the new procedure, the very first step of the selection process is its eligibility criteria, which is as mentioned below:
Second Step of the Process: Selection Process
Anyone who wishes to apply for a petrol pump need to look after the finances and arrange for the pre-requisite funds because the second step of the process caters to this very requirement.
Apply For A Petrol Pump Dealership
If you wish to apply for a petrol pump and fit in the above mentioned eligibility criteria and selection process, next step is to apply for a petrol pump dealership which you can do by following below mentioned steps:
Application Fees For A Petrol Pump Dealership
While the application fees for getting petrol pump dealership is Rs 100/- in case of rural retail outlets and INR 1000/- for regular retail outlets. However, there is a concession of 50% for those belonging to SC/ST/OBC categories. Also, one applicant can apply for one location only. Apart from the application fees, you have to pay a certain amount as non-refundable fees in case of dealer owned/company leased sites and certain amount in case of corporation owned sites, i.e.
Apart from the application fee, one has to pay the license fee in order to obtain petrol pump license i.e. at present the license fee for petrol pump is INR 18/KL for Motor Spirit and INR 16/KL for High-Speed Diesel for dealer owned “B” / “DC” site Retail Outlets and INR 48/KL for Motor Speed and INR 41/KL for High-Speed Diesel for a corporation owned “A” / “CC” site retail outlets.
Once you have got license of petrol pump dealership in your location, you have to ensure that you carry out the operations in legal and ethical manner. Also you need to be careful before you decide to transfer your petrol pump license to someone else, because firstly you cannot do so just like that and secondly you cannot transfer your petrol pump license directly and there are series of actions which you need to follow. Most importantly, you have to file for Reconstitution of petrol pump license and in order to file for same, your petrol pump should be at least 5 years old and your petrol pump license should not have been reconstituted for last 5 years.
If you fit in these two criteria, you can apply for the reconstitution of your petrol pump license in a prescribed form with all relevant documents which can be collected from your sales officer and as per the reconstitution; you can transfer 49% ownership to the incoming party whereas you still are the owner of 51%. Once your new partnership firm is registered as per the new defined percentage ownership, you got to wait for next 5 years in order to apply for another reconstitution in order to transfer your petrol pump license 100%. Thus, transfer of petrol pump license obtained on your name is not only a tedious but also a lengthy process.