There are over 250 million households in India which have LPG connections. But still 100 million households are without any LPG connection.
So there is a huge demand for new LPG gas connections and refills in the country. Businessman across the country can seize this opportunity and start a Gas agency dealership business.
In this article you will learn how you can get a Gas Agency Dealership in India and start distributing LPG cylinders in your area.
After reading the article you will get an idea how much money and infrastructure you will need to start this business.
Let us get started ….
Eligibility Criteria
Before you even think of entering into this business you need to learn what eligibility criteria are.
- Applicant should be a citizen of India and be an Indian resident.
- Educational Qualification – You must be 10th
- You should not be less than 21 years old and not more than 60 years.
- Applicants should not be a family member of an employee of Oil Marketing Companies.
- Applicant or any other member of the family should not hold a LPG dealership/distributorship.
- You should be physically and mentally fit to run the business.
- No proven cases of malpractices or adulteration.
These were some of the salient eligibility criteria to take note of.
Choosing Distributorship Area
A gas distributorship in India is divided into 4 major areas.
Urban Distributor
Also known as Sheheri Vitrak is for distributorship located in the urban areas of the country (as per Census 2011). They will distribute the LPG cylinders to customers living within the municipal limits of a metropolitan city.
Rural Urban Distributor
LPG distributors located in the urban areas can also distribute cylinders to the LPG customers in specified rural areas generally within 15 km of the city limits.
Distributing services in this area are called Rurban Vitrak.
Rural Distributor
Rural or Gramin Vitrak will distribute to customers located in the certain specified rural areas of the country. It will cover villages and towns falling within 15 km of limits specified by the OMCs.
Remote Area Distributor
They are also known as Durgam Kshetriya Vitrak, they will distribute in far flung areas of the country like forest areas, hilly regions, naxal areas and other disturbed areas etc.
As a dealer you will choose an area in which is you will be distributing LPG cylinders.
Basic Facilities Required
You need to have physical infrastructure in place to get a gas agency dealership. Here are few such requirements.
Godown Facility Requirements
- A Godown approved and licensed by Chief Controller of Explosives of Petroleum and Explosives Safety Organization (PESO) for storage of
- 8000 kg LPG for Urban Distributor
- 5000 kg LPG for Rural Distributor
- 3000 kg LPG for Durgam Distributor
- Plot requirements are
- 25 meter X 30 meter area within 15 km from the municipal limits for urban and semi urban distributors
- 21 meter X 26 meter area within 1 km limits for rural distributors
- 15 meter X 16 meter area for Durgam distributors
- The land for the construction of godown should be plain and free from any overhead power transmission, telephone lines, drainage, canals etc.
- All weather 2.5 meter wide road (public or private) connectivity
Requirement for the showroom
- Dimension must be 3 meter X 4.5 meter, the shop must be located within the municipal limits mentioned under the column of location in the advertisements
Transportation Requirements
- Delivery vehicles for the home delivery of LPG cylinders.
Investment Amount Required
- You must have a deposit amount of Rs 5 Lacs. Starting cost is more for urban distributors than rural.
If you can meet above mentioned requirements then you can apply for the distributorship.
Quota for the Dealership
One good thing about the gas agency distributorship is reservation. There are fixed number of dealerships that are allocated to certain categories.
| A | Open Category (0) | 50.5% |
| B | Schedule Castes/Scheduled Tribes (SC/ST) | 22.5% |
| C | Other Backward Castes (OBC) | 27% |
Application Fee and Submission
Distributors who fulfill the above eligibility criteria and infrastructural requirements can submit their application form online.
The status of the application is communicated through Email or SMS.
A distributor can apply gas dealership for more than one location but in that case he/she will have to submit separate application for each location.
Applicants have to pay a non refundable application fee.
For Sheheri Vitrak and Rubran Vitrak is Rs 10,000 for open category, Rs 5000 for OBC and Rs 3000 for SC/ST Rs 3000.
For Gramin Vitrak and Durgam Vitrak is Rs 8000 for open category, Rs 4000 for OBC and Rs 2500 for SC/ST.
Mode of Selection – Draw of Lots
Applicants can see their status of application on http://www.lpgvitarakchayan.in/”
The list of eligible applicants will be made available on the notice board of the concerned office of PSU oil marketing company website.
The notice with regard to the draw would be published in the same newspapers in which advertisement for appointment of LPG distributor was published.
Security Deposit
Selected candidates before getting the appointment letter will have to deposit interest free refundable security deposit to the respective OMC office.
| TYPE OF DISTRIBUTORSHIP | OPEN | OBC | SC/ST |
| Sheheri Vitrak | Rs 5 Lakhs | Rs 4 Lakhs | Rs 3 Lakhs |
| Rurban Vitrak | Rs 5 Lakhs | Rs 4 Lakhs | Rs 3 Lakhs |
| Gramin Vitrak | Rs 4 Lakhs | Rs 3 Lakhs | Rs 2 Lakhs |
| Durgam Vitrak | Rs 4 Lakhs | Rs 3 Lakhs | Rs 2 Lakhs |
Commissioning and Tenure of Distributorship
To commission the distributorship a candidate must have received ‘Letter of Intent’ (LOI) and fulfill the terms and conditions of the dealership.
The tenure of the distributorship shall be for an initial period of 10 years and renewable for every 5 years thereafter.
So this is how you will get a Gas Agency dealership in India.
I would suggest applicants applying for the dealership to bharatpetroleum LPG GAS distributor and visit their regional offices and learn more about the dealership requirements and selection process.