Have you ever thought about petrol pump owner earning?
Let’s find out.
First, we begin with the question: how much do owners generate from petrol pump income?
The fuel station income in India depends on several factors, such as sales, incentives, and operational costs.
Calculating these numbers every month gives us an idea about what monthly earning petrol pump owners make.
Dealer Commission Decides Petrol Pump Income
Dealer commission petrol diesel remains the most important source of income for fuel station operators.
The petrol pump owners receive their earnings from the fixed net profit per liter.
Reports suggest that in India, the current average dealer commission is Rs 3.5 per liter for petrol, and for diesel, it’s Rs 2.5 per liter.
Similarly, the fuel station income can be calculated by taking an example of a petrol pump that sells 2 lakh liters of petrol and diesel every month.
The average commission on the sale of per liter fuel is Rs 3; we can safely conclude that the owner generates Rs 6 lakhs a month as petrol pump income.
Petrol Pump Expenses and Net Profit Per Liter
However, let’s not get carried away by the income numbers in the previous paragraph. That was just the gross income.
There is a thing called petrol pump expenses as well, which includes salaries of staff, electric bills, multiple maintenance, and insurance.
The monthly expenditure to manage the petrol pump is Rs 2 lakhs to Rs 4 lakhs, depending on the size and location of the station.
After calculating, we find that for a petrol pump owner, the net profit per liter is around Rs 1 to 1.5, and it results in the monthly earning petrol pump of Rs 2 lakh to Rs 4 lakh in big areas.
The additional income sources petrol pump owners have are commissions from EV charging stations and the selling of lubricants.
Notably, the oil company bonus is offered by oil firms, based on fuel sales.
Taxation: Excise Duty and VAT on fuel
The government levies excise duty on petrol diesel and VAT on each liter of fuel sold.
However, the income generated from this goes into the pocket of the government, and it has no effect on the petrol pump profitability.
Is the Fuel Pump Business Profitable?
The fuel pump business model is profitable if the management is robust.
If the area is big, petrol pump profitability could surge, and profit could be maximized by additional income sources petrol pump owners make.
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