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Opening a petrol pump, also known as a fuel station, is one of the most profitable and long-term businesses in Nepal. With the rapid increase in vehicles, infrastructure growth, and dependency on petroleum products, the demand for petrol, diesel, and other fuels continues to grow every year. That is why many entrepreneurs and investors in Nepal consider obtaining a petrol pump licence as a stable and sustainable business opportunity.

In Nepal, the distribution and supply of petroleum products are strictly regulated by Nepal Oil Corporation (NOC) – the government-owned enterprise that has the monopoly over importing, storing, and distributing fuel across the country. Therefore, anyone who wishes to operate a petrol pump must meet the eligibility requirements, follow the proper process, and obtain a licence directly from NOC.

This article will provide a complete step-by-step guide on how to get a petrol pump licence in Nepal, the eligibility criteria, investment requirements, documentation, approval stages, and frequently asked questions.

1. Understanding the Petrol Pump Business in Nepal

Before applying for a petrol pump licence, it is important to understand how the petroleum distribution system works in Nepal.

Nepal Oil Corporation (NOC) is the only authority that imports petroleum products from India and other countries.

NOC then supplies the products to different fuel stations (petrol pumps), which are run by private entrepreneurs or cooperatives under licence agreements.

These pumps sell petrol, diesel, kerosene, and in some cases, LPG and lubricants, directly to consumers.

Since NOC controls the entire supply chain, every fuel station in Nepal must operate under its rules and policies. Without an official licence, no individual or company can run a petrol pump legally.

2. Why Open a Petrol Pump in Nepal?

The idea of opening a petrol pump attracts many business minds because:

1. Growing Demand for Fuel – Nepal’s vehicle numbers are increasing by more than 10% every year. More vehicles mean higher demand for petrol and diesel.
2. Stable Business Model – Unlike other businesses that fluctuate, petrol pump sales are steady because fuel is a necessity.
3. Government Support – Since fuel supply is essential, NOC supports operators with guaranteed product supply (depending on region and demand).
4. Long-Term Investment – A petrol pump requires a large initial investment but ensures consistent returns for decades.
5. Additional Services – Many pumps also provide car washing, lubricants, mini-shops, and charging stations for EVs, creating extra income streams.

3. Eligibility Criteria for Petrol Pump Licence in Nepal

To apply for a licence, applicants must meet certain eligibility standards set by Nepal Oil Corporation. These may vary slightly depending on the location (urban, semi-urban, rural), but the general requirements are:

a) Ownership and Legal Status

The applicant must be a Nepali citizen or a legally registered company/cooperative in Nepal.

Companies must be registered under the Company Act of Nepal.

b) Land Requirement

The most important eligibility factor is land availability.

Minimum road frontage required is usually between 100–200 feet, depending on the location.

The total land area required is approximately 10,000–20,000 sq. feet for highways and 5,000–10,000 sq. feet for city areas.

The land must be in the applicant’s name, or a legally leased property with proof.

c) Financial Capacity

The applicant must show proof of financial capacity, which means having sufficient capital to build infrastructure and manage operations.

On average, opening a petrol pump in Nepal requires an investment of NPR 3–5 crore (including land, construction, equipment, and working capital).

d) Compliance with Safety Norms

The location of the petrol pump must follow safety rules such as maintaining a certain distance from schools, hospitals, and residential buildings.

Firefighting, environmental clearance, and pollution control measures are mandatory.

4. Documents Required for Petrol Pump Licence Application

When applying to Nepal Oil Corporation, the following documents are usually required:

1. Application Letter addressed to NOC.
2. Citizenship Certificate of the applicant (if an individual).
3. Company Registration Certificate, PAN, and VAT certificate (if a company/cooperative).
4. Land Ownership Documents (Lalpurja/Title Deed).
5. Lease Agreement (if land is leased).
6. Land Location Map approved by the local authority.
7. Financial Documents – Bank statement, source of funds, and net worth certificate.
8. Blueprint and Layout Plan of the proposed petrol pump.
9. Environmental Impact Assessment (EIA) or Initial Environmental Examination (IEE) clearance certificate.
10. Tax Clearance Certificate (if applicable).
11. No Objection Certificate (NOC) from the local municipality or ward office.

5. Step-by-Step Process to Get a Petrol Pump Licence in Nepal

Now let us go through the step-by-step procedure of obtaining a licence:

Step 1: Research and Land Selection

Identify a strategic location with high traffic flow such as highways, city entry points, or major road intersections.

Make sure the land size and road frontage meet NOC requirements.

Verify land documents and ownership.

Step 2: Prepare the Proposal

Draft a detailed proposal including land details, expected demand, financial capacity, and business plan.

Attach maps, land blueprints, and photographs of the site.

Step 3: Submit Application to Nepal Oil Corporation

Submit the application with all required documents at the NOC regional office (according to your province).

Pay the required application fee.

Step 4: Verification and Site Inspection

After submission, NOC officials will verify the documents.

A technical team will conduct site inspection to check if the land and location meet requirements.

Step 5: Environmental and Safety Clearance

Obtain approval from the Ministry of Forests and Environment (EIA or IEE clearance).

Ensure firefighting systems, underground tank arrangements, and safety measures are included in your plan.

Step 6: Approval and Licence Issuance

If the site is suitable and all documents are valid, NOC grants a Letter of Intent (LOI).

After completing construction as per NOC’s technical specifications, the applicant must request a final inspection.

Once the inspection is successful, NOC issues the operational licence.

Step 7: Infrastructure Construction

Construct the petrol pump infrastructure including:

Underground fuel tanks

Dispensers and pumps

Office building

Canopy and signage

Safety equipment (fire extinguishers, sand buckets, alarms)

Toilets and customer waiting areas

Step 8: Agreement with NOC

A formal dealership agreement is signed with Nepal Oil Corporation.

The operator commits to selling petroleum products only from NOC and at government-regulated prices.

6. Investment and Cost Breakdown

The total cost of opening a petrol pump in Nepal depends on land price, construction, and equipment. On average, it ranges from NPR 3 crore to 5 crore.

Major Cost Heads:

1. Land Purchase/Lease – NPR 1–3 crore (depending on location).
2. Construction (tanks, canopy, office, toilets, etc.) – NPR 50–80 lakhs.
3. Fuel Dispensing Machines – NPR 25–40 lakhs.
4. Firefighting & Safety Equipment – NPR 10–15 lakhs.
5. Environmental Clearance & Approvals – NPR 5–10 lakhs.
6. Working Capital – NPR 50 lakhs–1 crore.

7. Challenges in Obtaining Petrol Pump Licence

While profitable, the process of obtaining a licence is not always smooth. Some common challenges include:

1. High Investment Requirement – Only financially strong individuals or companies can afford the initial setup.
2. Land Availability – Finding suitable land with proper road frontage is difficult in urban areas.
3. Lengthy Approval Process – Getting environmental and safety clearance can take months.
4. Bureaucratic Hurdles – Paperwork and site inspections may cause delays.
5. Strict Monopoly – Since NOC is the only supplier, operators cannot import fuel themselves.

8. Tips for Success in Petrol Pump Business in Nepal
9. Choose Location Wisely – Highways and major road intersections guarantee higher sales.
10. Maintain Safety Standards – Fire safety and environmental rules must be strictly followed.
11. Customer Service – Train staff for polite behavior, accurate fuel dispensing, and quick service.
12. Diversify Income – Add lubricants, tyre shops, convenience stores, and EV charging points.
13. Maintain Transparency – Avoid malpractice in fuel measurement to build trust.

9. Future of Petrol Pump Business in Nepal

With the government promoting electric vehicles (EVs), some people worry about the future of petrol pumps. However, experts believe fuel stations will remain profitable for at least the next 15–20 years, as the majority of vehicles still depend on petrol and diesel.

Moreover, petrol pumps can adapt by adding EV charging stations alongside fuel dispensing. This will ensure long-term sustainability and relevance.

Conclusion

Getting a petrol pump licence in Nepal is a lengthy but rewarding process. With the right land, financial resources, and compliance with NOC’s requirements, entrepreneurs can secure a licence and build a profitable business. Although the investment is high, the steady demand for fuel ensures long-term revenue and stability.

If you are planning to apply, start with proper research, arrange finances, secure suitable land, and prepare all documents. Once you meet NOC’s eligibility criteria, you can confidently move forward in the application process.