Setting up a petrol pump in India can be a highly profitable business, especially with increasing fuel demand and widespread transportation needs.

However, establishing a petrol pump involves substantial capital—making financing a crucial first step. Whether you’re looking to start from scratch or expand an existing outlet, this complete guide to getting a loan for petrol pump in India will walk you through the process, eligibility, documentation, and best practices.

1. Understand the Types of Loans Available

Before applying, it’s important to know the types of loans available for petrol pump businesses:

a) Term Loans

These are standard business loans for setting up infrastructure, buying equipment, or acquiring land. Repayment usually spans 3 to 10 years.

b) Working Capital Loans

Used to manage day-to-day expenses like staff salaries, fuel purchases, and maintenance. These are often short-term and renewable annually.

c) Machinery or Equipment Loans

Special loans for purchasing fuel dispensers, underground tanks, automation systems, etc.

2. Know the Capital Requirements

Starting a petrol pump in India can cost anywhere between ₹30 lakh to ₹2 crore, depending on:

    • Location (rural vs. urban)
    • Size of the outlet
    • Type of dealership (company-owned or franchise)
    • Licensing and approvals

    Most banks finance up to 75%–85% of the total project cost, and the rest must be arranged by the applicant as margin money.

    3. Loan Eligibility Criteria

    To qualify for a petrol pump loan, you typically need to meet the following conditions:

      • Age: 21 to 60 years
      • Indian citizen or a registered business
      • Good credit score (CIBIL score above 700 is ideal)
      • Valid dealership offer letter or LOI (Letter of Intent) from an oil marketing company (OMC) like IOCL, BPCL, or HPCL
      • Collateral or guarantor may be required depending on loan size

      4. Documents Required

      Prepare these documents before applying:

        • Business plan and project report
        • Dealership allotment letter or LOI
        • KYC documents (PAN, Aadhaar, etc.)
        • Income tax returns (past 2-3 years)
        • Bank statements
        • Land ownership or lease agreement
        • NOCs and local authority approvals (if available)

        Some banks may also require a feasibility report and environmental clearance certificate.

        5. Top Banks Offering Loans for Petrol Pumps

        Here are some banks and NBFCs that offer petrol pump business loans:

          • State Bank of India (SBI)
          • Punjab National Bank (PNB)
          • HDFC Bank
          • Axis Bank
          • SIDBI (for small-scale fuel retailing)
          • Bajaj Finserv and other NBFCs (for working capital needs)

          Interest rates typically range from 9% to 16%, depending on your creditworthiness and loan type.

          6. Tips for Faster Loan Approval

            • Maintain a high CIBIL score
            • Provide a detailed and realistic business plan
            • Keep all documents updated and verified
            • Apply through official bank channels or authorized agents
            • Respond quickly to bank queries

            Final Thoughts

            Getting a petrol pump loan in India is entirely possible with the right preparation and documentation. With a booming fuel market and government support for infrastructure growth, this business venture holds great promise. Use this complete guide to getting a loan for petrol pump in India as your roadmap to make the process smoother, faster, and more successful.