New Delhi. Petrol pump business is still a profitable deal? What are the opportunities and challenges for the new entrepreneurus, running a petrol pump in India has long been considered a ‘Respectable’ and a stable business model. But questions have started to arise in the era of EV revolution, digital payments, and changing policy – is this business still a profitable deal as it was a decade ago?
Many people feel that petrol rates are above Rs 100, so the pump owner is making a big profit – while the truth is that the pump owners get a fixed margin on every liter, which is usually in this range.
Margin on petrol: ₹ 3 to ₹ 4.50 per liter
Margin on diesel: ₹ 2.50 to ₹ 3.50 per liter
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Meaning if a pump sells 8,000 liters of fuel daily, its daily earnings can be around ₹ 25,000 – ₹ 35,000, of which expenses are different.
How much investment does it take to open a petrol pump?
Government oil companies like IOCL, BPCL, HPCL periodically seek applications for opening new dealerships. But this is not a cheap deal:
- Land: Better if it is own, some conditions are imposed on rental land
- Infrastructure: ₹ 70 lakh to ₹ 1.2 crore expenditure (tank, machine, building, CCTV, office etc.)
- Working Capital: ₹ 10-20 Lakh (Staff, Maintenance, Loading, Insurance, Pump Stock etc.)
- If the loan is taken, then there is a repair term of 5–7 years, but interest and load also have to be kept in mind.
Way to increase margin
Today’s pump operators are not just working by selling fuel – they have found many smart ways to increase their income:
- CNG station facility (where possible).
- Adding EV charging points.
- Giving ATM, Fastag, Mineral Water, Engine Oil and Washing Service.
- Renting rest zones, dhaba or shops for trucks.
major challenges
- Fear of EV Transition: Petrol demand may be affected in the coming 10–15 years.
- High Compliance: Strictness in fire safety, weight and measurement, PDS audits etc.
- Staff and Security: Pressure from fraud to night shift.
- Cash flow pressure: If there is a delay in supply from government oil companies, then there can be liquidity crunch.
Is this business still right for new people?
If you have a good location (near the highway or large town), and you can operate this business by staying on the ground like an owner-so even today it is a solid mid-term investment. But it would be wrong to consider it as ‘passive income’.
New trend
Now petrol pumps are also becoming smart – it has become mandatory to connect with digital payment, automated nozzle tracking, stock management software, and EV charging. The government is also gradually preparing this sector for transition in the direction of green energy.