Petrol Pump Income: There is often a debate on the rising prices of petrol and diesel. But have you ever wondered how much a petrol pump owner earns by selling every liter of fuel? Does he really earn a lot? Let’s know the real truth.
How are the rates of petrol and diesel decided?
The price of petrol and diesel is made up of many components. Suppose the rate of petrol in Delhi is Rs 96 per liter (for example). The pump owner gets an average commission of Rs 4.39 per litre. The commission slab is decided by companies like Indian Oil (IOCL), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL). After deducting the pump related expenses like salary of employees, electricity and maintenance from the fixed commission, the net profit remains Rs 1 to 1.5 per litre.
This is included in Rs 96
How much profit does a petrol pump owner make?
The petrol pump owner has to cover all his expenses from the dealer commission. Expenses included in this
Electricity bill
Salary of employees
Machine Maintenance
Land Rent/Lease
bank loan interest
administrative expenses
After all this, the net profit often remains only Rs 1 to Rs 1.5 per liter.
Petrol Pump Income: Is running a petrol pump a profitable deal?
Where sales are high (like highways, metro cities), the profit is good. But in small towns and villages where sales are low, it becomes difficult to even recover the cost.
Income from diesel
The price of a liter of diesel in Delhi is Rs 87.67. On this, the pump owner gets an average commission of about Rs 3.02 per liter. The commission on diesel is less than petrol, the reason for this is its lower base rate. The tax on it is also less than petrol. After deducting the expenses, the net profit remains from 1 to 1.5 rupees per liter.
How much income from petrol pump?
The income of a petrol pump owner can never be fixed. This income depends on the volume of sales. For example, if a pump sells 5,000 liters of petrol daily, then it will earn Rs 21,950 (4.39 × 5000). Similarly, if diesel is also sold in the same quantity, then it will get a commission of Rs 15,100 (3.02 × 5,000). The combined commission of both is about Rs 37,000 per day.