Petrol Pump Dealerships: Changes from the Past to the Present

Petrol as a commodity has been essential from the yesteryears of Independence. Earlier when petrol was sold under the government’s regulated companies the status of monopoly was limited to only them. The shift in the marketing of petrol and the setting up of petrol pumps were seen with the branding of petrol. The invitation to privatization opened doors for companies like Reliance, Essar oil, and other big players of the market. Hence, the competition for the presence in hydrocarbon was growing and the involvement in core areas of retailing, marketing, and trading increased.

One such company Nayara Energy that has transformed from the renowned Essar Oil to a modern and complex downsizing company aims to globalize India’s stake in the energy market. It can be seen through the eight percent retailing capacity of the organization that is carried out by its second-largest oil refinery in India. Not only this, Nayara Energy has a presence in retail at more than 5400 outlets that speaks of its massive growth as one of the biggest retailers of India

The organization is working in core areas of retailing, trading, marketing, and asset development. The purpose of development is not only limited to these areas but also focused on achieving sustainability. The 360-degree outlook of the organization puts them ahead of other public and private sector companies of the industry.

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Previous Fuel Marketing Conditions

The previous norms for the companies providing the dealerships for petrol pump were set by the Indian Government in 2002:

• In 1997, the government of India decided that companies owning and operating refineries with an investment of at least Rs.2,000 Cr. or oil exploration and production companies producing at least 3 million tonnes of crude oil annually are entitled to marketing rights for transportation fuels like petrol, diesel, etc.
• The company that invested Rs.2,000 Cr. in exploration and production (E&P), refining, pipelines, or terminals was the only one to be available to the authorization to market transportation fuels like petrol, high speed, diesel and also aviation turbine fuel.
• Thirdly organizations willing to set up retail outlets or petrol pumps should have had at least Rs.250 Cr. at the time of making an application to the central government for the authorization.

The requirement of Land for Dealership of Petrol Pump

The land specifications required to own a petrol pump are between 800 Sq. Meters to 2000 Sq. meters depending on the location whether the land is in rural or the mainland area. The land should be owned by you or can be leased by the oil dealership company for a specified period.

If you are applying for a dealership of Nayara Energy, the following conditions should be fulfilled with the legal requirements and filling of the application:

• You should have a clear title of the land. Ideally in the name of the franchisee.
• The land should be adjacent to road, leveled and also developed.
• It should be more than 800 sq. meters in a town or more than 1200 sq. meters. on a highway.
• Fixed application fee
• The fee to own a license to apply for petrol pumps varied between Rs.12 lakhs to Rs.25 lakhs. The amount differs depending upon the location of the petrol pumps whether they were near to the highways or in town. Funds were to be in saving schemes, bank accounts, shares, mutual funds, or bonds. Sixty percent of the total value was evaluated in share and bonds. Hence, funds invested in cash, jewelry, and current balances were not included as funds for the application.

Changing Norms in Fuel Marketing Conditions

As the market has become a fast-paced for oil companies and multiple refineries in India new norms are set up by the Indian Government where following opportunities are being given:

• License for new generation alternate fuels like compressed natural gas (CNG), biofuels, liquefied natural gas, electric vehicle charging points, etc. at their proposed retail outlets within three years of operationalization of the said outlet.
• Spaces for non-oiling companies to invest in this fast-growing market.
• Any business entity has to set up at least 100 retail outlets, out of which at least 5 percent of the proposed retail outlets shall be set up in the notified remote areas within five years of the grant of authorization.
• These changes have opened ways for multiple level investment and relaxed norms for any non-oil company to set up retail outlets and enter into dealerships for the petrol pump. Any entity with a set number of budget fulling the legal requirements, land requirements and is able to get his application passed can set up a petrol pump within the available time and resources.