The petroleum industry which is also known as the oil industry includes the process of exploration, extraction, refining, transportation and marketing the products in the market.
India is considered as the second largest Oil and Gas refinery in Asia. With 21 refineries in India, according to India’s Ministry of Petroleum and Gas, India has an estimated amount of 594.49 million tons in crude oil reserves. As of 2018, India imports around 82% of the oil needs. India also exports diesel, gasoline, aviation turbine fuel, fuel oil and many more. The Indian government plans on extending India’s 9500-mile pipeline by more than 18000 miles by 2019 to help facilitating oil trade to foreign markets and domestic distribution of oil in the Indian consumer markets.
What Exactly Does Reliance Industries Ltd Do?
Reliance Industries owned by Mukesh Ambani is based out of Jamnagar, Gujarat owns the world’s largest refining hub. Reliance has also partnered up with British Petroleum in order to expand their upstream sector I.e search and drilling of potential crude oil and natural gas reservoirs.
Reliance Petroleum Ltd is a company that is owned by Reliance Industries Ltd. Their main focus is on driving the nation towards growth by providing advanced products and services which includes diesel, petrol, auto LPG, lubricants, aviation fuel and many more. As of now, there are 1300+ petroleum retail outlets that are spread across the country backed by superior technology.
Reliance Petroleum Limited is also getting benefited from an alliance with Chevron India Holdings Pvt. Limited in Singapore which currently holds a 5% equity stake in the company.
History of Reliance Petroleum Ltd
Reliance wanted to harness an emerging value by creating opportunities in the global refining sector. In order to do so in 1991, Reliance Industries Ltd set up a subsidiary which as known as Reliance Refineries Private Ltd. The name of the subsidiary was later changed to Reliance Petroleum Limited.
In 1993, Reliance Petroleum Limited launched its IPO which at that time was India’s largest IPO ever. Reliance further continued to further lead financing channels in India and became the first company to raise capital on the foreign market in Luxembourg. Reliance finally got its opportunity to enter the Oil and Gas industry in 1997, when the Indian oil industry has reached a state of collapse.
Once the government agreed to the plan and granted Reliance on the right to import petroleum directly, Reliance built one of the world’s largest and modern petroleum refinery complexes in Jamnagar for around $6 billion. The site was commissioned in 1999, making the company’s production capacity double than any other Indian refinery. In 2002, Reliance petroleum was merged with Reliance Industries, which then became one of the top three companies in India.
Unique selling Propositions of Reliance Petroleum Limited
- Reliance is a well-known company that follows world-class processes and automation systems that work uniformly and consistently 24*7 to provide assured quantity and quality.
- The company is considered as one of the largest players in the industry of Oil and Gas.
- They have great financial stability and shows strong profitability every year as they do not compromise on their quality.
- Reliance has well-trained, knowledgeable and courteous pump attendants.
- They have shown tremendous operational efficiency in refining which has put them right at the top of the consumer market.
- Reliance always uses new and state-of-the-art technology to find new oil resources and finding suitable marketing and distribution channels to sell its refined products.
- By merging with Reliance Industries, Reliance Petroleum has become the world’s single largest refining hub and world’s 17th largest refining company, giving their company a strong and reputed identity.
- It is also listed as one of the fortune 500 companies.
Benefits of owning a Reliance Petrol Pump Dealership in India
Would you like to start your very own Reliance Petrol Pump franchise in your city? If yes, then starting a petrol pump business is a lucrative option of making money quickly. Here are some added benefits of opening a Reliance Petrol Pump franchise:
- RPL franchise provides round-the-clock service and product availability.
- Every dealership outlet will have well-trained, groomed, knowledgeable and courteous attendants.
- State-of-the-art automated system to ensure accurate quantity and assured quality products.
- The wait time for dispensing products are comparatively less due to its high-speed dispenser equipment.
- The dealership also provides a wide range of payment options and quick electronic billing for every transaction which makes it easier and hassle-free for its customers.
- Each dealership outlet has free drinking water, free air service, clean washrooms.
- The company outlets deliver products such as high-speed diesel, petrol, auto LPG and lubricants across the country.
What are the requirements to start a reliance petrol pump dealership in India?
Location of the franchise outlet is of utmost importance. There are two locations where you can choose to open your outlet.
These areas are generally on the outskirts of the city such as on highways. As people can never be too sure about finding another petrol pump on the highway routes, therefore it is a more lucrative business to open up an outlet as it will attract more customers. The area required to set up a petrol pump on the highway is 800 Sq.ft.
If you are planning on setting up a Reliance petrol pump outlet in the city, then it is crucial to open it someplace where there is no other petrol pump in the vicinity. Hence opening a pump outlet will attract more customers. In order to do so, the total area required is around 1500 Sq.ft.
Skills or experience required
- The employees should have adequate knowledge about the products that are sold at the franchise outlet so that the right information can be passed on to the customers as well.
- The petrol attendant will be responsible for cleaning car windshields, collect payments from customers through whichever mode of payment the customer is comfortable to pay in. They should also activate the fuel pump and fill fuel tanks of vehicles to a specified level with either diesel, petrol or gasoline.
- Employees at Reliance Petrol Pump outlet should have good communication skills and should be well-groomed and courteous to the customers.
- They should be flexible to work in different shifts.
- The gas station manager should be responsible for the inventories and interactions with all the vendors. He should also create an employee schedule, supervise mail activities among other duties.
- The owner of the outlet should have a minimum qualification of at least 10th or 12th pass.
Operational regions of Reliance Petrol Pump outlet
- As of 2018, there are 1,343 Reliance petrol pump outlets across India.
- RIL and BP have decided to jointly set up another 2,000 petrol pumps across India.
- RIL provides managerial and back-hand office training to the station manager who is appointed at the dealership franchise outlet.
- The franchise owner is responsible for enforcing the rules and regulations of the parent company. Hence the owner would be required to undergo the necessary training to understand how the parent company works in their other retail outlets.
Minimum staff requirement
- 3 gas station managers are required since it is a 24*7 petrol pump outlet.
- 8 pump attendants are required since it is a 24*7 petrol pump outlet.
- 2 air pressure attendants are required since it is a 24*7 petrol pump outlet.
How much does it cost to start a Reliance petrol pump in India?
The total investment that a persons need to contribute to setting up a Reliance Petrol Pump Dealership Franchise in your city is Rs.50-70 lacs excluding land cost.
RIL also takes Rs.23,50,000 as a security deposit which is refundable.
RIL also requires Rs.3,50,000 as signing fees.
The franchise given is DODO (Dealer Owned Dealer Operated). All the civil work is carried out by the dealer which includes the construction of driveway, Boundaries, canopy, facia and Salesroom building and the dealer is also responsible for hiring staff at the outlet. The owner should have the means necessary to either buy/rent the land required and also invest money in building the gas station.
The profitability of having a petrol pump explained through a hypothetical example.
Total investment done for Petrol Pump X = Rs.50,00,000
Expenses incurred on a monthly basis
- Staff salary for 10 employees = Rs.1,00,000/monthly
- Rent for 1000 Sq.ft of land = Rs.1,50,000/monthly
- Miscellaneous expenses = Rs.20,000/monthly
Total expenses incurred in a month = Rs.2,70,000
Income earned on a monthly basis
If there is a footfall of 50 customers on a daily basis who get their vehicles fuel tank filled with petrol, the average amount incurred in a day would be Rs.10,000 (keeping 1 person spending Rs.200). Therefore income earned through petrol on a monthly basis is 10,000*30 = Rs.3,00,000
If there is a footfall of 30 customers on a daily basis who get their vehicles fuel tank filled with diesel, the average amount incurred in a day would be Rs.3000 (keeping 1 person spending Rs.100). Therefore income earned through petrol on a monthly basis is 3000*30 = Rs.90,000
Total income earned in a month = Rs.3,90,000
Total profit = Rs.1,20,000 (Rs.3,90,000 – Rs.2,70,000)
You’re total investment of Rs.50,00,000 will be earned back within 36-40 months.
The overall success and profitability of a newly opened petrol pump franchise depend on various factors:
- Distance from the other petrol pumps in the vicinity
- Staff behavior
- Size of the gas/fuel station
- Other amenities
In addition to the above factors, profitability also depends upon the brand value/identity of the parent company. Your franchise outlet needs to have a strong brand image that offers value and assured quality to all its customers.
Based on all the details laid out in the article above, one should seriously consider opening a Petrol pump with Reliance. It requires a significant start-up cost but once you manage that, it can soon create huge returns-on-investment over the long term.
As these petrol pump dealerships are owned and managed by the dealer they have flexibility with the types of services they offer other than the necessary standards of Reliance. They do not have to pay monthly royalty fees like other companies or work on a commission basis. That is the main reason why Reliance Petrol Pump tops the Oil and Gas industry as it has established its strong brand identity which offers value and loyalty to all customers. In addition to this, the company also provides 100% automated IT network integrated with state-of-the-art technology.
We hope, through the article we have been able to explain how to set up your very own Reliance Petrol Pump Dealership.