[Start-it-up] How To Start A Fuel Delivery Business? In India only diesel can be delivered and not petrol, because of the government regulations.

By Entrepreneur Staff

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

A fuel delivering startup is an emerging concept that provides doorstep refueling services to its customers. Most of the companies have a website and a mobile app through which you can place your order and also track your fuel consumption and spending.

In contrast to petrol pumps, fuel delivering startups provide convenience and saves time. You can order fuel in far-fetched areas where there is no petrol pump nearby. For example, you can order diesel for your colony generator without having to go anywhere.

However a thing to note is that right now in India only diesel can be delivered and not petrol, because of the government regulations.

What is the size of the fuel delivering market?

According to Economic Times, "India has almost the same number of vehicles as the US at 200 million, yet the number of fuel stations fall acutely short in comparison. Broad estimates peg the country's fuel stations at 60,000, one third the number compared to that of the US at 160,000."

Apart from the personal automobiles - tractors used in farming, generators used in industries, hospitals, schools, etc.also require diesel to function.

Economic Times story further claims, "Opening of 100,000 new fuel stations is also practically and economically an impossible task due to the soaring land prices. In fact, a CRISIL report in June 2019 also revealed that there is room for only about 30,000 fuel pumps if the current throughput levels have to be maintained."

Opening a fuel delivery startup is much easier as compared to starting a petrol pump. Plus the demand opens a huge market opportunity for fuel delivery startups in India.

Who are your prospective clients?

Hospitals, apartments and residential complexes, schools, cab rental companies and big corporate houses like OYO Hotels, Delhivery, Jaquar, Amazon, Wipro, Toyota, etc. are your prospective clients.

Investment Plan (courtesy - Pep Fuel)

To start a fuel delivery startup, the most important thing to keep in mind are the rules and regulations by the government. You need to take an approval from the state-run Petroleum and Explosives Safety Organization (PESO) for your startup. You will need to get proper licenses for your company.

The startup also requires some heavy investment.You will have to invest in Mobile Defense Units (MDUs) or the specialized vehicles that will transport your fuel.

Below is the breakup of a 100 MDUs fuel delivery startup.

1 MDU costs rupees 23 lakh and the license cost per MDU for 10 years is INR 20,000.

IT cost (including development of the front-end and backend infrastructure) will cost you another INR 20 lacs and your operational cost per MDU will be 60k monthly.

Return On Investment (courtesy - Pep Fuels)

Return on investment of 1 MDU will take you about 10 months. The Delivery Capacity per day of an MDU is 15000 liters and the margin as of now are INR 1.20 per liter and the margin after the government policy gets shaped will be INR 2.10 per liter.

Entrepreneur Staff

Entrepreneur Staff


Related Topics

News and Trends

FlexifyMe Raises $1 Million In Seed Funding

The funds will be used to further enhance the AI motion coach, making it available in local languages, and expanding the platform's reach in the MENA and North American regions

News and Trends

Zeron Secures $500,000 In Seed Funding

The infusion of capital will be used towards fueling Zeron's ongoing research and development initiatives, advancing the frontiers of AI-powered cybersecurity, and expanding its global presence

Business Plans

10 Simple Tips to Write a Successful Business Plan

In the new book "Write Your Own Business Plan," business expert Eric Butow takes the anxiety and confusion out of planning and offers an easy-to-follow roadmap to success.

News and Trends

IIM Kashipur FIED Sanctions INR 1.6 Crore Funding For 10 Agriculture Startups

An agreement for the agri consortium was formalised during the 'Agri-Entrepreneurship in South Asia' Consortium-2023

News and Trends

The New Face of Money: How Banks are Leveraging Metaverse for Good

Banks have long banked on two phenomena- if they can get the attention of customers when they are young, they can hold on to them for life and the customer-executive relation in a traditional physical space. But with time, the sector has aced spotting which change to adapt and which to avoid. Safe to say, they have been open to the adoption of Metaverse and virtual realities in their systems.

News and Trends

Electric Motorcycle Startup Raptee Raises $3 Million In Pre-Series A Funding

The funds will be allocated towards augmenting the manufacturing facility, acquiring machinery, tooling for the soon to be launched motorcycle, and to scale up the team