In today’s world, people don’t want to be limited to just a job; they want control over their time and income. This is why self-employment and distribution-based business models are becoming increasingly popular. An LPG gas agency is one such business, the demand for which never ends.
The Pradhan Mantri Ujjwala Yojana has given a new impetus to this sector by delivering LPG cylinders to every village. Now, the use of gas cylinders instead of wood and cow dung cakes has become common even in rural areas, due to which the gas agency business is continuously growing.
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Eligibility Criteria for Opening an LPG Gas Agency
The person applying for a gas agency must be a citizen of India. The minimum educational qualification is 10th pass, although applicants from the freedom fighter category are exempted from this rule. The applicant’s age should be between 21 and 60 years. In addition, the person should not be an employee of any oil marketing company as of the date of application.
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Why is Choosing the Area Most Important?
Before opening a gas agency, it is crucial to survey your area. It is important to understand which company’s gas is more popular there and what the number of customers is. LPG distribution falls into four categories, including Urban, Rurban, Rural, and Remote areas. The application process and investment amount may vary depending on the area.
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How Much Does it Cost to Open an LPG Gas Agency?
Starting an LPG gas agency requires an average investment of Rs. 15 to 30 lakhs. This cost includes warehouse construction, office setup, vehicles for transporting cylinders, necessary equipment, and the security deposit paid to the company. Sometimes, companies also offer some discounts for better locations and a strong delivery system.
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The Complete Calculation of the Security Deposit
The amount of the security deposit depends on the category and area. In urban and rural areas, this amount is up to Rs. 5 lakhs for the General category, while it is set lower for OBC and SC/ST categories. This deposit is comparatively less in rural and remote areas. During the selection process, an initial deposit of 10 percent of the amount is required, followed by field verification and document verification.
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How much can you earn from an LPG gas agency?
An LPG gas agency is considered a stable and year-round business. Currently, a distributor receives a fixed commission on each 14.2 kg domestic cylinder. If an agency supplies 3,000 cylinders a month, it can generate a gross income of several lakhs of rupees. Even after deducting expenses, a substantial net profit is possible. In urban areas, where hundreds of cylinders are delivered daily, this business is even more profitable.