When it comes to starting a business, the most important factor to consider is the availability of funds. Previously, establishing a gas station (also known as a petrol pump) in Pakistan required a large financial investment and was seen as a business for Pakistan’s wealthy and influential. However, since 2002, when local private OMCs were allowed to set up sites across Pakistan, building a gas station and getting into the oil retail sector has become easier and more financially viable. A person can now buy a franchise of a private Ltd OMC for as little as Rs. 200,000/-, however OMCs with a solid reputation continue to charge more.
- The cost of obtaining No Objection Certificates (NOC) from various organizations/government departments, as well as the cost of commercializing the land on which the pump will be built.
- The cost of the gas station’s construction, which includes the cost of civil work, materials, and so on.
- Costs of infrastructure development such as a canopy, tanks, and flooring tiles, among others.
- Dispensers, generators, and other machinery require money.
- Working capital is required to purchase petroleum products for resale.
So, here’s the million-dollar question: how much money is required to construct a petrol station in Pakistan?
The solution is entirely dependent on you and your preparation. A low-cost petrol station with no canopy and rudimentary facilities and machinery might cost anywhere between 6 and 10 million rupees. A typical petrol station with a typical configuration will cost between $10 and $20 million. It will cost you more than 20 million rupees to 45 million rupees to build a hefty site with all the standards and state-of-the-art machinery.
These figures are for places outside of major city regions, and land costs are not included. If you wish to open a filling station in one of Pakistan’s main cities, it will cost significantly more than these estimates due to the commercialization of land, which is far more expensive within the city limits and can cost up to tens of millions of rupees.
Is it profitable to run a fuel station in Pakistan?
Operating a single Shell service station, or a group of Shell service stations, is a significant commitment. Because many of our service stations provide a variety of fuel and non-fuel products and services and are open 24 hours a day, 365 days a year, you’ll need to be confident in your team’s ability to provide world-class service at all times.
You will set the standard for the business under your control if you are motivated and well-organized. You’ll need to be able to think creatively, inspire professionalism, and work well with a wide range of individuals, including your customers. Remember that getting their repeat business is critical to your success; it will be up to you and your staff to impress them with service, uniqueness, and innovation.
You contribute your talents, business approach, excitement, commitment, and passion for innovation as a self-employed retailer, while we provide the service stations, fuel, assistance, and a thorough retailer-training program. In a nutshell, we’ll collaborate to expand the company in an open and honest manner.
- You will be compensated based on your achievement of goals.
- Increase your revenue by expanding your firm and exceeding projected sales while keeping expenditures under control.
- Shell will decide the service station’s core product line and will own all stock.
- To run the service station, you will hire and manage your own employees.
Returns on investment
Your earnings will vary depending on the type and number of stations you operate, as well as their locations, but you can expect to earn between PKR 2,500,000 and PKR 3,500,000 per year in year one (for a single site), with the possibility of higher earnings if you exceed targets and keep costs under control.
We’ll need a bank guarantee as a kind of security. The amount depends on the features of the site/cluster and the findings of your credit assessment. In order to fund your business and purchase initial shares, you may need a working capital amount.
Supporting your success
At first, you’ll get supervised work experience and an on-the-job training program at a Shell service station that’s specifically suited to your needs. As you grow, we’ll tailor a series of training courses to help you improve your skills.
Still Have Questions? Please see the section below:
I’d like to start my own company, but I’m not sure if I have the necessary experience. What credentials do I require?
There are no formal requirements, although the ideal candidate will have at least a bachelor’s degree and/or five years of work experience. To succeed, you’ll need dedication, drive, business acumen, and a passion for invention. Working capital will be required, as well as security in the form of a bank guarantee.
You will be given supervised work experience as well as a series of training sessions that are specifically customized to your needs.
You will be required to offer financial security in the form of a PKR 1,000,000 bank guarantee due to the nature of the business. The amount of operating capital that may be required varies depending on the cluster/location site’s and size.
It’s anticipated that the selection process, business planning, and training course will take three to six months (depending on the location of service station or clusters).
Your revenues will vary depending on where you operate and how many service stations you have, but you may expect to earn between PKR 2,500,000 and PKR 3,500,000* each year in year one (for a single station), with the possibility of more if you meet your targets and keep your expenditures under control. Please keep in mind that all values are estimates.
Disclaimer: The earnings statistics listed above represent the estimated range for a single-station retailer. They are not guaranteed, and real revenues may differ depending on a variety of factors, including cluster size and site efficiency. If you are chosen to run a Cluster, the size of the Cluster will depend on the number of sites available.
How much money can you make at a petrol station in Pakistan?
“Your income will depend on the type and number of stations you run and their locations,” according to Shell Pakistan’s website, “but you can expect to earn between PKR 2,500,000 and PKR 3,500,000 per annum from year one (for a single site), with the possibility of additional earnings if you exceed.”
How do I start a gas station in Pakistan?
When considering the business viability and future profitability of a petrol pump station in Pakistan, there are various things to consider.
- The land and pumping stations are in the same location.
- Using the services of competent legal and financial counsel,
- Strive to provide the best services possible while utilizing the most cutting-edge technology available.
With the current market structure in mind, the most critical of these factors to give you the best chance of success is to provide the highest possible quality of service to your clients in order to achieve a competitive advantage.
- The country’s population is rapidly expanding, as is its per capita income and the sheer quantity of cars and other vehicles it presently has.
- During the winter, the low pressure of gas gives a diesel and petrol filling station a considerable advantage over a CNG station.
- Demand for all petroleum products is increasing, even in neighboring nations like Afghanistan.
- Because the demand for all petroleum products is elastic, it remains constant.
- The search for a variety of oil sources.
From a legal standpoint, this business entity’s proposed structure is that of a franchise with either a sole proprietorship or a joint proprietorship. While the entrepreneur’s choice affects this decision, the feasibility report is often based on the franchise having a single owner.
An entrepreneur must pay a joining fee as well as a security deposit in order to join an OMC as a dealer/retailer. The membership fee is typically around Rs.100,000, with a security deposit of around Rs.300,000 (these fees keep varying and changing over time).
The franchise fee is paid to the OMC on a regular basis. This price is normally between 0.10-0.15Rs per litre of petroleum delivered by the company. This is countered by the fact that the OMC is responsible for all equipment, machinery, and ongoing maintenance, which does not come out of the franchisee’s pocket.
On the same principle, other amenities such as the aforementioned car wash, tuck shop, and tyre shop can be constructed. The car wash and tyre shop fees are approximately 0.02-0.03 rupees per litre.
*These fee estimates are solely meant as a guideline and may vary depending on the terms of the franchisee’s agreement with the OMC. These projections are also altered throughout time.
The franchisee, like the OMC, receives a portion of the earnings from every litre of gasoline or diesel sold. OGRA, the Oil and Gas Regulatory Authority, decides and regulates this percentage. The percentage will normally remain constant, but the value will range between 0.85 and 1.50 rupees per litre of fuel and about the same for diesel.
The process of opening a fueling station entails a few key procedures that must be followed in order to meet the requirements of both the oil marketing corporation (OMC) and the government.
An oil marketing company receives a written application (expression of interest) from an entrepreneur interested in becoming a franchisee (OMC). The applicant requests that the OMC evaluate his property for the purpose of retailing petroleum and lubricant products.
Following the initial survey, OMC examines the applicant’s credibility (both social and financial) and talents, and then an expert from OMC conducts a feasibility assessment to determine the viability of the applicant’s land in relation to its location. After meeting the project’s feasibility criteria, OMC enters into a retailer ship agreement with the applicant and leases his land to him for a minimum of 15 years. The rent is a small amount determined by the land’s location.
Following the signing of the agreement, OMC’s architects create a plan for the site that depicts the projected structure of the site in accordance with national standards. The application, along with the map, is then forwarded to the district coordinator officer (DCO) in order to obtain no objection certificates from the relevant departments for this project. The DCO convenes a consultative meeting with representatives from the relevant departments to critically evaluate the project and communicate whether or not they have any issues. The DCO gives a no objection certificate for the required project based on the opinions of all representatives.
The explosives department is in charge of giving licenses for the storage and sale of explosive (petroleum) products. Finally, the OMC submits an application for a license to the Department of Explosives. The NOC and the sight map provided and approved by the DCO are included in the application.
After receiving authorization from the explosives department, development on the infrastructural structure will begin according to the approved map. The entrepreneur and the OMC split the cost of the infrastructure. The firm covers the entire cost of the machinery and equipment, while the entrepreneur is responsible for the civil work. Following completion, an OMC specialist engineer inspects the site. The OMC’s engineer issues a certificate of “safety and completion” to the sight that was built according to the regulations.
The explosives department’s inspector of explosives conducts a sight inspection as the last and last phase. The inspector conducts a thorough inspection of the site (particularly the gasoline storage tanks) in accordance with the explosives department’s predetermined rules before granting the franchisee (entrepreneur) permission to begin his operation.
Based on double-shift services, the station’s yearly sales capacity should be 2.85 million litters of gasoline and diesel. For financial projections, capacity utilization will be at 80% in the first year, then increase at a rate of 5% per year until it reaches 95%.
The overall land needed for the project would be 15,000 square feet, which would include a car wash, tire store, and office structure.
The Fueling Station should be located near a populated region, taking into account other important factors such as human resource availability, electricity, and water. For this aim, a site in the heart of the city would be ideal, ensuring that a healthy population surrounds the fueling station as well as the necessary infrastructure.
Are petrol station owners well-off?
Q. How much does a gas station owner make? In India, a fuel station owner can make up to Rs 3,58,000 per month. Your monthly gross earnings will be 5,70,000 Rupees if your commission is 3 Rupees per litre.
What is the profit in a gas station?
Is it profitable to own a gas station? A petrol station, as we all know, is open 24 hours a day, seven days a week, and you may easily make a profit of 2 to 2.5 rupees per litre on petrol and 1.80 to 2.40 rupees per litre on diesel. The monthly profit ranges from 1 to 2 lakh rupees.
In Pakistan, which small business is the most successful?
The following are the top ten small enterprises in Pakistan that can generate large profits:
- Agribusiness is a type of business that is based on agriculture.
- Establish a restaurant.
- Open up a coffee shop.
- E-commerce is a type of business where products are sold online.
- Agency for real estate.
- Services for digital marketing.
How do I go about starting a gas station?
Not only in India, but around the world, the petrol pump business has traditionally been regarded as one of the most profitable. This is largely due to the transportation and logistics sector’s ever-increasing growth and resulting demands. Another obvious cause is the rising demands of the average person’s daily commute. Furthermore, in today’s world, owning a vehicle is nearly a need for a middle-class individual to secure his comfort and convenience in day-to-day living.
As a result, starting your own fuel pump business is a viable alternative in today’s world. Despite the fact that it entails a significant amount of legal duties and paperwork, it is one of India’s most profitable enterprises. Furthermore, Oil Marketing Companies (OMCs) want to create more feasible prospects in order to support the growth of the petrol pump sector in India in 2020-2021.
The following is the procedure and formalities for opening a petrol pump business in India:
What is Pakistan’s most profitable business?
Pakistan’s economy is complicated. There are some booming businesses and some that are faltering due to government corruption, but there are still many fresh company ideas for Pakistanis to consider because the country has a large number of competent and talented workers. There is a business concept for you out there, from the footwear industry to supplying meals to the underprivileged, car parts manufacturing, and so on.
Many investors have large sums of money in their accounts, but they are unsure about which business to pursue. Such people frequently invest their money in less profitable company initiatives, and their investments generally fail to meet their expectations. There isn’t a single profitable enterprise in Pakistan. Pakistan’s business market is quite varied. Market trends change throughout time, resulting in new opportunities.
How much money does it take to open a gas station?
To open a petrol station, the applicant must be able to invest a minimum of Rs. 25 lakhs in standard gas stations and Rs. 12 lakhs in rural petrol stations.