Fuel Start-up is the new buzz word in the Start-up ecosystem of India. Hitherto all of the retail fuel distribution was carried out by the state owned Oil Marketing Companies through various retail fuel outlets. But in a recent development, Government of India brought a change in the policy and petroleum laws to allow doortep delivery of diesel by Petroleum and Explosives Safety Organisation approved Mobile petrol pumps.
Often revolutions in the industry are brought upon on the back of great technological innovations coupled with great business models to benifit all the stakeholders in an ecosystem. Fuel Start-up backed by Government support and technological innovations is one such revolution.
Fuel Start-ups viz-a-viz Retail Petrol Pumps:
Retail petrol pumps caters to majority of the fuel needs in the country but starting a retail petrol pump is no small task. A retail petrol pump business not just demands heavy investments upfront but the day to day operational operational costs are also very high. This contracts the profit margins in the business and thus results in long break even time in the business. The manpower cost every single month is also high. Aquisition of land for a retail petrol pump is a tedious task and upon starting of such an outlet, the prime lands are also locked for a long long tenures of time. Comparitively, all that a fuel startup has to do to start a fuel reselling business is to own a PESO approved mobile petrol pump and register the startup as a company and it is all set to start such a business. The cost incurred in doorstep diesel delivery business with a startup are minimal when compared to a retail petrol pump and also the daily operational costs are miniscule. All this lends to Fuel StartUps becoming a great option for an aspiring fuel entreprenuer.
Retail petrol pump Vs Robile petrol pump
Retail Petrol Pump:
1. Overall Investment: 5-10 Cr
2. Prime land is locked
3. Huge manpower cost(Operation cost)
4. Very long break even times
5. Low returns on investments
Repos Mobile Petrol Pump:
1. Overall investment: 25-30 Lakhs
2. No investment in land
3. Negligible manpower/operational cost
4. Small breakeven time
5. High returns on investment
Such attractive business model has seen numerous aspiring fuel entreprenuers flock towards becoming a fuel startup. So far more than 200 startups have already registered on the Repos platform and there are hundreds of them in the pipeline. Looking at the current trend and the future projections, a revolution is surely on its way!