The business idea to start LPG gas agency dealership in India may be a long term and stable business opportunity. Liquefied Petroleum Gas (LPG) finds a wide range of application both in domestic cooking and commercial and industrial use. As the demand for clean fuel surges among households and businesses, there are many entrepreneurs seeking ways to venture into this industry. This blog describes the eligibility, investment, and the anticipated profit margins in an easy to understand language.
What Is LPG Gas Agency Dealership?
An LPG gas agency dealership can enable an individual or a company to sell LPG cylinders to domestic and commercial customers and occasionally LPG cylinders to industrial domestic and commercial customers within a given locality. Government oil marketing companies and authorized suppliers who are usually privately owned offer dealerships.
Storage, delivery, safety compliance, customer service, and record-keeping are the areas of concern of the dealer. As LPG is a hazardous substance, the safety guidelines should be followed strictly.
Eligibility Criteria
In order to submit an application to be an LPG gas agency dealership in India the following basic requirements are required:
1. The candidate should be a citizen of India and be at least 21 years old.
2. The educational qualification usually needs minimum of 10th or 12th pass.
3. The candidate is not supposed to have criminal history.
4. There is a need of land to house a godown (storage area) and an office. The storing place should have safety distance requirements by the Petroleum and Explosives Safety Organization (PESO).
5. The oil companies in some instances conduct short listing of applicants by way of a lottery.
Investment Required
The amount of investment made will be determined by the location and the size of operations. The investment that it will take might be around Rs. 10 lakh to Rs. 25 lakh on average. This includes:
a. Security deposit
b. Prices of cylinders and equipment.
c. Renting or building godown and office.
d. Delivery vehicles
e. Employee wages and operating reserve.
In case the dealership also supplies LPG gas to industries, there will be a possibility of increased storage and infrastructure costs because of increased cylinder capacity and other safety provisions.
Profit Margin and Earnings
Oil companies usually regulate profit margins in this business which are fixed per cylinder. Dealers make a commission on all domestic, commercial as well as LPG cylinders sold as industrial use in India.
A dealer might earn an average commission of Rs. 40 to Rs. 60 on each domestic cylinder and the commercial and industrial cylinders will offer a little higher. The profit per month is based on the volume of sales. The dealerships are in position to earn continuous revenue in high-demand towns because of the customer replenishment.
Conclusion
This is a reliable business model with a steady demand that is presented by an LPG gas agency dealership. But it needs to adhere to safety regulations, adequate infrastructures, and rigorous operations. Individuals who know the local demand, particularly of LPG gas to be used by industries in India, can develop a stable and sustainable source of income in the long run.
To those who need to have a well-organized direction and consistent assistance in this area, A One Gas offers appropriate industry knowledge and operational expertise to make the LPG distribution business responsible and efficient.
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