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Petrol Pumps: How much money does a petrol pump owner make in India?

Read : HOW PETROL AND DIESEL COST US IN INDIA?

Whenever I visit petrol pump to fill 1 or 2 litres petrol, one curious question suddenly spark in mind,”How much money does a petrol pump owner make in India?”.Today I have got its answer from Quora.com.I am not clear whether it is correct or not but we may take it as a granted as answer is given by one of the petrol dealers as follow,

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Parag Sharma, HPCL Retail Outlet Dealer  –  Parag is a Most Viewed Writer in Oil and Fuel Prices.

 

A petrol pump dealer’s profit totally depends upon a number of litres sold in a month. In case of diesel, the commission is around 1.19rs per litre (varies for every dealer) whereas for petrol the commission comes up at around 2rs per litre(varies). So for example, if a petrol pump dealer has a sale of 1.5 lakh litres of diesel and 0.5 lakh litres of petrol per month, his GROSS profit would be approx 2.79 lakh rupees. Now calculate margin in the business, dealers commission/cost of fuel=??!!!
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*Taken from : https://www.quora.com/Petrol-Pumps/How-much-money-does-a-petrol-pump-owner-make-in-India
So, as per Parag Sharma, it’s a lucrative business and I have read the news that soon anyone can open petrol pump in India.If it’s a such a great opportunity, I would like to share the following article hope it may be useful to someone, somewhere!

Here, I am putting answer of one of the most probable threat also.Please, go through it also to understand the case thoroughly.

Why do people say that opening a petrol pump is not profitable, but people still keep opening new ones?

Jessica Henry, 25 years experience as business philosopher, trend setter, philanthropist

***Source: https://www.quora.com/Why-do-people-say-that-opening-a-petrol-pump-is-not-profitable-but-people-still-keep-opening-new-ones

8 comments

  1. […] Also Read : Petrol Pumps: How much money does a petrol pump owner make in India? […]

  2. Very good perfect information provided in other website we ask some question their provide some other answer ,thankyou

  3. hii sir oc how much amont deposit to company and company that amount intrut is giving or not
    and 1 tr percent how much

  4. Is there any role of petroleum engineer over here? Can license be provide to petroleum engineer?

    1. Hi Shweta,

      You can start your consultancy being a petroleum engineer and deal with ….What factors should be kept in mind before constructing a petroleum station in a city? What is the process? etc. etc.

      Anyway this is my personal suggestion only. So far,your query about license,you have to inquire to authorized agencies,I don’t have any knowledge about it.

      See,following two links and you can search similar links through search engine :

      http://www.essaroil.co.in/franchisees/own-an-essar-fuel-station/faqs.aspx

      http://economictimes.indiatimes.com/industry/energy/oil-gas/indian-oil-hindustan-petroleum-bharat-petroleum-may-soon-let-anyone-open-petrol-pump/articleshow/48322926.cms

      Good Luck!

      Prashant Pandya

  5. Hi prashant ji,
    It was good info. provided but one question i want to ask is, which oil co. you prefer is good within all??

  6. very useful calculations

    thanku

  7. The post was very informational. But I have a few calculational propositions to suggest, because I have identified some numbers that might not be absolutely right with your article.

    Assuming the owner has to make up for 99 litres of fuel per day to compensate for losses that would have been incurred otherwise, he/she chooses to oversell the volume of petrol by 22ml per litre. So, for 99 litres to be made up over the course of 6000 L sale, you need to oversell only 16.5ml of fuel, whereas the owner chooses to oversell by 22ml per litre so he/she ends up saving 5.5 ml of fuel per litre of fuel sold. Multiplying that by the total fuel sales in one day(6000), the saved amount becomes 33 litres, in one day. Thus, over the course of a month’s duration, that is 990 litres of fuel saved by the owner, the market value of which becomes Rs. 67500.00 according to the price you have stated. (0.66 L =Rs. 45)

    Now coming to the commission of Rs. 1.5 per litre, the cost of maintenance, weekly payment made to govt. authorities, labour, come down to around Re. 1 per litre, as stated by you, which means the owner makes 50 paise per litre and according to your calculations, he makes 65000/- per month from this. But if you factor in the saved amount from the overselling of fuel, it comes down to a total of, 132500 per month, keeping in mind that the saved amount( Rs. 67500.00) will never be taxed cause the fuel never existed on paper for it to be sold in the first place.

    Coming from a background of business, I can tell you, that most petrol pump owners have their own private delivery system and storage solutions to cut down on the evaporative loss of fuel in their tankers. So, the only loss the owners incur is the 100 L oversold by the petrochemical company per 12000 L of oil sold. Any manufacturing/dealership/tradership/transport agency, is liable to show wastage of materials that occur in the range of (1-10)%, meaning, even if we conisder the minimal wastage of 1% shown while filing their e-return(GST), or Central Excise return, we cover for more than the 100 L per 12000 L that is oversold to us by the company. And like you said, any decent petrol pump introduces overselling of fuel by about 30ml per litre, i.e., they give us 970ml stating it as 1000ml, it can be shown that, the owner makes in the ballpark of Rs. 433000.00, per month.

    Guess there IS a reason people keep opening petrol pumps, one after the other.

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