The quality of life in India seems to have improved over the years. Today, many Indian homes have bikes & cars. Why not? The automobiles form an essential part of life, and this has impacted fuel consumption. Besides, the steady rise in the number of cars has called for a massive surge in the demand for petrol pumps.
How to Get a Hindustan Petrol Pump Franchise?
Despite the hike in the prices, the only commodity in the world which is increasing in demand is fuel. Though the rule of the thumb in the market is when the price is high, the demand for a product reduces, it does not seem to apply to fuel.
There is always demand for fuel because Indians need a steady supply of fuel to commute on a regular basis. It could be for personal work, it could be to the office, or it could be for a pilgrimage.
Besides, there are buses & trucks that run on diesel. A small hiccup in the supply of fuel sees the entire town or city come to a standstill. This means that the power of opening a petrol pump never dampens.
For any petrol pump owner, the demand for fuel is always on the rise because the number of the automobiles on the road is increasing. Though there are some reliable names like Reliance and Bharat Petroleum, Hindustan Petroleum (HP) is one of the most profitable among them.
It is interesting to note that the average Indian petrol station sells around 5-6 lakh litres of petrol & diesel monthly. Hindustan Petroleum Corporation Limited (HPCL), is a government-owned oil and gas company.
Today, they have close to 15,000 petrol pumps in the country. In this blog, details on how to become an HP petrol pump franchise are discussed.
So, how to get Hindustan petrol pump franchise? HPCL decides on whether the potential petrol pump owner can become one, depending on the dealership location. That is why, the potential owner may want to pay close attention to the highways, main roads, and also the bypass route.
- An Indian national may only own the petrol pump unless they are able to abide by income tax laws.
- The individual should be more than 21 years old and not older than 55. There are some exceptions for freedom fighters.
- They should have completed their 10th grade as the minimum educational requirement.
- They have fulfilled the minimal prerequisite of completing an HSC-level exam.
Documents required to become an HPCL dealer
Source: https://www.yumpu.com/en/document/view/22293962/hindustan-petroleum-corporation-ltd
The following documents have to be provided when applying for the HPCL dealership by the franchise. This is done to ensure that the franchise owns the property for the HPCL dealership.
- They need to provide the registration sale deed or an agreement.
- In some parts of India, the documentation may be in the form of Khasra or Khatauni. This shows that the property belongs to the potential petrol owner.
- They can also provide the shareholdings of other kinds or transmission of a deed. This can be signed by the government or semi-governing agencies
- The dealer for the HP petrol pump can’t permit employment.
- Besides, if the petrol owner is working somewhere else, they need to provide them with a resignation letter from the former employer. The letter has to confirm that their employment has been terminated.
Moreover, the owner has to have a notarised document, that they are not engaged with any private sector. When the owner is educated from abroad, then they have to provide the equivalent certification from the relevant officer, state government, or federal government.
This is so that they can easily purchase the required property for starting the petrol pump, and have a duplicate NSC and value credentials. However, a duplicate of the Demat declaration may be needed for the registration businesses.
Once the dealership agreement is signed, the franchise or the petrol owner has to comply & adhere to the terms of the agreement. They are then responsible for ensuring the day-to-day operations of the business are running smoothly.
Benefits of becoming a Hindustan Petroleum dealer
Source: https://x.com/HPCL/status/874561286155018240
HPCL is a popular brand name in the petroleum industry. Even their competitors & rivals know the worth & value of the company. However, there are other things to consider before opening an HP petrol pump in their city or town.
Some of the main competitors for HP would be BPCL & Reliance Petroleum. Below are some common benefits of starting an HP petrol pump.
- Though the price of the petrol & diesel has been increasing in India, there is no sign of the demand reducing. That means consumers are still demanding these products. Moreover, the demand for EVs hasn’t been that great in this country due to the poor infrastructure. So, it may take a few more years for the EV stations to be set up in India. Besides, Indian consumers are satisfied with their fuel cars and have no inclination to change as of now. A franchise or owner can confidently open the petrol pump, without having to worry about the future.
- Another factor that works in favour of the franchise is that the number of automobiles is only increasing in the country. When the number of bikes, cars, buses, and trucks increases on the road, the chances of making more money stand. Besides, the company allows franchises various other services providing the petrol pump owner an additional revenue stream.
- The government is also encouraging units that represent Hindustan Petroleum Corporation Limited. So, if the petrol owner is able to ensure that the location is in a prime area, then they stand to make good profits. When the pump is based in a busy area or on the highway, then it can guarantee large traffic volume and profitable operations.
- HPCL is a government-aided company. So, the profits & other variables can frequently positively impact the business. There is no chance of the changes in the government policies affecting the HP petrol pump business. There is also no need to be worried about the previously listed details as they won’t affect the operations of the petrol pump.
Read More – Franchise Business India: Opportunities, Ideas, & Insights
Conclusion
From the above, it is quite apparent that starting an HP petrol pump is a profitable business, provided the franchise knows how to go about things. The commissions on the petrol & the diesel earned is pretty good for the petrol owner.
Besides, when the location is ideal, then the pump stands to rake in a lot of money. However, they need to also have the right kind of business partners & consultants to help them out. This way, they can’t go wrong in any step of the way in opening a petrol pump in India.
Starting a business may not be a smooth affair, as there are several documentation processes to be done too. So, with the right kind of partners & consultants, things may sort out quicker. Likewise, starting an HP petrol pump franchise requires the licensing from the HPCL company.
The entrepreneur or franchise may want to have a talk or discussion with the seasoned petrol owners in the city or town where they want to open the pump. They need to have a good market and client experience.
FAQs
What is the minimum investment for an HP petrol pump?
The minimum investment for opening an HP petrol pump will come to around Rs. 25 lakhs to Rs. 30 lakhs. This is due to the standard HPCL RO qualifying requirements. To open rural petrol pumps, it may cost around Rs. 12 lakhs on par with the HPCL ROs. In some cases, the initial cost may be higher depending on the real estate & taxes in the state.
How much does it cost to get a franchise of a petrol pump?
A franchise would have to invest at least Rs. 15 lakhs or more when they want to obtain the dealership from them. In the case of major cities and urban settlements, then it may come to around Rs. 1 crore to Rs. 2 crore. However, the company ensures that the location of the business does not come under the excluded or blacklisted zones.
How much land is required for an HP petrol pump dealership?
The minimum amount of land that is required for starting an HP petrol pump dealership would be 1200 square metres. In the city, the required land would be 800 square meters. This area is fine only for certain cities. But, when the franchise wants to open on the state or the national highway, then the land requirement stays at 1200 square meters.
What is the monthly profit of the petrol pump?
An average petrol pump in India sees business of around 600,000 litres of fuel sold per month. The profit per litre stands at Rs. 3 or more. In the case of diesel, the profits are somewhat lower as the profit per litre is Rs. 2 or less. It can provide the petrol pump with Rs. 18 lakhs to Rs. 20 lakhs profit per month.
This entirely depends on the location of the petrol pump. When the pump is located strategically in the city or on the highway, then it stands to make good profits. Besides, the pump may want to market their locality for major clients like schools, colleges, and universities to come & tank up there. In some cases, petrol pumps solely rely on these institutions for their monthly profits.
What is the monthly earnings of a petrol pump in India?
The commission that is earned per litre of petrol & diesel sold could hover around Rs. 3 & Rs. 2 respectively. For example, when a consumer fills petrol for Rs. 2000 per month to Rs. 3000, then the pump stands to earn around Rs. 80-100 per month. Likewise, when 500-800 customers fill for the same price, then the petrol pump can easily earn close to Rs. 40,000 to Rs. 50,000 per day.
In some cities, petrol pumps see close to 2000-3000 customers who fill petrol & diesel. Besides, trucks & buses visit the petrol pump at night to fill their whole tank of diesel. All this can be considered.
Are there any incentives or bonuses provided by HPCL based on performance?
Definitely. HPCL provides petrol pumps with incentives & bonuses depending on their profits & sales volume. Besides, they also see the customer satisfaction and the adherence to safety standards of the petrol pump. After all, the petrol pump sells their own product, and their profits matter to HPCL.
Can one own multiple HPCL petrol pump dealerships?
One can own several HP petrol pumps in the city or even in the rural region. This depends on the land requirement. Moreover, the franchise should be able to meet all the eligibility for opening the petrol pump. The dealer margins for the oil marketing companies are mostly the same, and hence the profits are decided on the sales volume.
It is measured through the PPT or the per-pump throughput in the country. Most of the HP petrol pumps have the highest PPT in the country, which makes perfect sense to start a pump in the city or rural region.
What is the daily income of the petrol pump owner?
If a petrol pump owner is able to sell 4000 litres to 5000 litres of petrol & diesel per day, then the daily earnings stand at Rs. 15,000 to Rs. 20,000. Likewise, the commission earned in selling per litre of petrol & diesel is around Rs. 3 & Rs. 2 respectively. If the petrol pump can sell close to 4000 litres to 5000 litres per day, then the owner can earn around Rs. 10 lakhs to Rs. 15 lakhs per month.
How is the profit on petrol decided in India?
Today, the government of India has given a free hand to the state-run oil conglomerates including Hindustan Petroleum Corporation Ltd (HPCL), Indian Oil Corporation (IOC), and the Bharat Petroleum Corporation Ltd (BPCL). They are doing pretty well, and most of their employees earn good pay packages. All this is possible because of the monthly sales of the petrol & diesel that is being done in the country, driven by declining crude prices.
How to calculate the petrol pump dealer commission?
According to Hindustan Petroleum Corporation Limited (HPCL), they provide around Rs. 3 per litre commission on every litre of petrol that is sold. In the case of diesel, it is around Rs. 1.8 to Rs. 2 for every litre of diesel that is sold.
