How To Apply For CNG Pump Dealership: A Complete Guide With Required License Details

As the world wrestles with climate change, Compressed Natural Gas (CNG) is becoming an increasingly popular alternative to traditional fossil fuels like petrol and diesel.

In India, the CNG market is booming, with over  940,000 CNG vehicles being sold as of FY 2024, and the number is growing.

So if you are looking to open a CNG pump, it is the appropriate stage.

CNG pump is a profitable venture and a step towards supporting sustainable development and the environment.

I am here with a step-by-step guide that will provide the essential steps, and requirements, to help you set up your own CNG pump dealership, including obtaining the necessary licenses.

Future Potential Of CNG Pump

The CNG industry in India is poised for significant growth, driven by government initiatives and consumer demand.

• The CNG market is expected to grow at a CAGR of 10.2% from 2023 to 2028, fueled by the increasing adoption of CNG vehicles and government support for cleaner energy.
• As of 2023, there are over 6000 CNG stations across India, with plans to increase this number to 10,000 by 2030. This expansion creates a ripe opportunity for new dealerships.
• CNG is a cleaner alternative to traditional fuels, reducing CO2 and other poisonous emissions by up to 25% compared to gasoline and diesel.

Requirements For Opening A CNG Pump Dealership

Opening a CNG pump dealership involves meeting several criteria:

Land Requirements

Location:

Choose a location with high vehicle traffic. The land should be strategically placed near highways, urban areas, or industrial zones.

With the number of CNG vehicles on Indian roads projected to reach above 10 million by 2030, choosing the appropriate location plays a crucial role in the profitability of CNG pump. Different CNG companies impose different criteria for Pump location.

Size:

Depending on the company and scale, the required land area typically ranges from 700 to 2,000 square meters. It may vary depending on several factors.

Ownership/Lease:

You must own the land or have a long-term lease agreement. Also, CNG companies permit CNG dealerships to be in partnership.

CNG Pump Dealership Cost

• Initial investment varies by location, scale, and company criteria. Usually, it ranges from INR 50 lakhs to INR 2 crores approximately.
• Ensure you have sufficient working capital to cover operational costs such as salaries, utilities, and maintenance. CNG pumps generally report a profit margin of around 20-30%, depending on location and sales volume.

Application Process For CNG Pump Dealership

Choose CNG Supplier

• You have to decide which CNG company you want to partner with, such as Adani CNG Dealership, Indraprastha Gas Limited, Mahanagar Gas Limited, or others. Each company has its own criteria and application process.

Below is a list of some of the well-known CNG dealership providers in India

Submitting the Application

• Online Application: Most CNG companies have an online application portal. You have to be prepared to provide detailed information about your land, financials, and your background.
• Documentation: Typical documents required include land ownership/lease documents, financial statements, ID proofs, and a business plan.
• Application Fee: An application fee, typically ranging from INR 2000 to INR 1 lakh, may be required.

Screening And Interview

• Your application will undergo a multiple screening process, where the company officials will evaluate your suitability based on land location, financial strength, and business acumen.
• If you already own a Petrol pump or have experience working in the petroleum industry and related industries, provide an upper hand on your dealership grant.
• If shortlisted, you may be called for an interview to discuss your plans and ability to manage the dealership. Asdo Company officials will visit your CNG pump site to check all criteria.

Required CNG Pump Dealership License In India

Once your application is approved, you’ll need to obtain several licenses and approvals.

Below are the permissions required for setting up the CNG station:

Explosives License

• Petroleum and Explosives Safety Organization (PESO): Apply for an Explosives License from PESO, mandatory for handling and storing CNG. With over 70,000 applications processed annually, PESO is crucial for ensuring the safety of fuel operations.

Environmental Clearances

• State Pollution Control Board: Obtain necessary environmental clearances to ensure compliance with regulations on emissions and waste management. With India’s focus on reducing emissions, this step is critical.

Fire Safety Approval

Secure approval from the local fire department, ensuring your station meets all fire safety standards.

Local Municipal Approvals

Get the required permits from the local municipality for constructing the CNG station, including zoning approvals.

Setting Up the CNG Station

Once all licenses and approvals are in place, you can begin the setup process:

Construction and Infrastructure

Station Layout: Design the station layout, ensuring compliance with safety standards. India’s CNG infrastructure is expanding, with over minimum of 1,000 new stations expected in the next two years, so planning will play a crucial role in the profitability of your CNG gas station.

Equipment Installation: Install CNG dispensers, storage tanks, compressors, and other necessary equipment per the supplier’s guidelines.

Hiring and Training Staff

• Hire skilled staff, including station managers, attendants, and maintenance personnel.
• Provide comprehensive training on safety protocols, customer service, and equipment handling.

Final Step Of Launching CNG Station

• Advertising: Use local advertising, local newspapers, holding, social media, and online platforms to promote your new CNG station. Given that online searches for CNG pumps have increased by 40% in the last year, digital marketing is essential.
• Inauguration: Consider hosting a grand opening event to attract local customers and create awareness among people.

Ongoing Operations

• Customer Service: Focus on providing excellent customer service to build a loyal customer base from the beginning. Stats show that customer satisfaction in CNG stations directly impacts repeat business.
• Maintenance: Regular monitoring and maintenance of equipment is essential to ensure safety and reliability.

Things To Keep In Mind Before Applying For CNG Pump Dealership In2024

• Beware of ongoing fraud in the name of providing CNG pump dealership.
• Don’t pay money or personal data to anybody except CNG dealership company officials.
• To get detailed information about the criteria and requirements for a particular CNG company dealership program you may visit the official website or contact the official CNG pump dealership contact number.

FAQ About CNG Pump Sikar

Conclusion

Opening a CNG pump dealership is a promising business opportunity, especially in today’s eco-conscious market.

As we know Government Of India aims to have 15% of vehicles running on natural gas by 2030, creating an enormous potential market.

By carefully following the steps outlined in this guide, you can successfully navigate the process and launch a profitable CNG station.

With the right strategy, investment, and dedication, your CNG pump dealership can contribute to a greener future while delivering substantial returns on your investment within a shorter period.