How To Start an LPG Gas Agency In India? [Step-by-step Guide]

LPG is a necessity in every household and other industries such as hotels, restaurants, and so on.  And that makes it one of the most profitable businesses in India.

Is starting a gas agency as easy as it seems?

The answer is two-fold. It is an online process, so it is hassle-free. But you have to fulfil all the eligibility criteria to get approved for the agency.

As we all know, Liquefied petroleum gas (LPG), is a flammable mixture of hydrocarbon gases such as propane and butane. It needs to be operated carefully and therefore the government has set some rules as to who should be allowed to start an agency.

Here is a detailed guide on how to start an LPG gas agency in India.

The first step to starting an agency is to figure out what the distributorship requirement in your area is. There are four types of distributorship.

Type of Distributorship Area For LPG Gas Agency:

These definitions are taken from a brochure provided by LPG Vitarak Chayan.

• Sheheri Vitrak

Sheheri Vitrak is the LPG distributor located in the Urban Area who provide LPG to customers located within the municipal limits of the town or the area specified by the respective Oil Marketing Company (OMC).

• Rurban Vitrak

Rurban Vitrak is a distributor located in the Urban Area and also provides LPG services to villages falling within 15 km from the municipal limits of the LPG distributorship location or as specified by the respective OMCs.

• Gramin Vitrak

Gramin Vitrak will provide LPG services to customers of the Rural areas. It will cover the villages within 15 km from the LPG distributorship location or as specified by the respective OMCs.

• Durgam Kshetriya Vitrak (DKV)

These distributors will provide LPG to customers located in difficult and special areas mostly to locations where Gramin and Rurban Vitrak are not feasible.

*The definition of ‘Urban’ and ‘Rural’ is as per Census 2011.

These are the general concepts of distributorship. Please refer to the brochure for detailed definitions.

You can choose the distributor type according to your area. Then you can go through the eligibility criteria to apply for the distributorship in your area.

Eligibility Criteria For An LPG Gas Agency

The basic eligibility required to apply for the distributorship of LPG is as follows:

• The applicant must be a resident of India.
• The applicant must have passed the 10th standard from a recognised board. (Not applicable for applicants belonging to the Freedom Fighter (FF) category.)
• The age of the applicant must be between 21 to 60 years. (Not applicable for applicants belonging to the Freedom Fighter (FF) category.)
• The applicant should not be a family member or an employee of OMC as of the date of application.

Other than the points mentioned above, there are additional requirements for the applicant that are mentioned in detail in the brochure.

Please go through the brochure to determine if you are eligible for the distributorship.

Then, you can go through the process to apply for the agency.

Also Read: Gas Stove Brands in India

How To Start An LPG Gas Agency In India?

Apply online through the LPG Vitarak Chayan website to get selected.

There are three main types of LPG distributorship of Public Sector Oil Marketing Companies (OMCs).

• Bharat Gas
• Indane Gas
• HP Gas

There are also private gas distributors. You can contact their offices to get distributorship. But these are the most in-demand and government-approved dealerships.

The procedure to apply for distributorship for the above-mentioned dealers is simple and hassle-free.

The OMCs release notices for the requirement of distributors in the area through newspapers and websites. Keep an eye on the notices released by the authorities and then apply for the dealership. We have discussed the detailed procedure below.

Step-By-Step Process To Apply For An LPG Gas Agency

Step 1: Register on the LPG Vitarak Chayan Website

Go to website https://www.lpgvitarakchayan.in/

Click on ‘Register’ if you are applying for the first time. And you will have to provide a valid mobile number to generate OTP.

Step 2: Create your Profile

Once you receive the OTP, fill in the remaining details and create your profile. You are now ready to apply for the distributorship.

Step 3: Lookout for advertisements

All the OMCs update their requirements from time to time. You will find the latest advertisements in the ‘Important Link’ tab on the website.

Step 4: Apply through the website

When you find the advertisement for your area you can apply through your profile. Therefore it is necessary to create a profile beforehand. It makes the application process easy.

You will have to pay the application fees depending on your distributorship. And the application fees are non-refundable.

Here is the summary of the application fees.

1. Non Refundable Application Fee for Sheheri Vitrak & Rurban Vitrak locations

2. Non Refundable Application Fee for Gramin Vitrak locations & Durgam Kshetriya Vitrak locations

Once you have successfully applied for the distributorship, your profile will be scrutinised by the authorities. You will be notified via email or SMS about your application status.

What Next?

If you get selected, you will be called for an interview. The authorities might also want to inspect the office and godown area before approving your distributorship. And it's called Field Verification of Credential (FVC).

Selected applicants will have to submit the documents mentioned in the brochure and pay 10% of the security deposit before Field Verification of Credential. The details of the amount to be paid are given below.

After successful submission and approval of documents, the candidate will be issued a Letter Of Intent (LOI).

The selected applicants will have to pay the security deposit to respective OMC’s. It is interest-free and refundable to issue the appointment letter.

The security deposit amount to be paid is as follows:

You will be notified about further steps by the OMC. You will also be given training about staff management, vehicle usage and so on.

And if they find you to be the perfect fit for the distributorship, you will be given a chance to run an LPG gas agency.

We hope this guide on how to start an LPG gas agency in India was helpful for you.

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Disclaimer: All the information about eligibility criteria and fees is taken from the LPG Vitarak Chayan website and is subject to change depending on the website. You are requested to check the website for all the information at the time of application.

FAQs

Q. What is the tenure of distributorship?

Ans. The tenure of the HP Gas (HPC) & Bharatgas (BPC) Distributorship shall be for an initial period of 10 years and renewable every 5 years thereafter. Renewal is subject to the examination of the performance of the distributorship by the respective OMC and decision thereon.

The tenure of the Indane (IOCL) LPG Distributorship shall remain in force for an initial

period of 10 years from the date of execution of Distributorship Agreement and continue thereafter until determined as per rights mentioned in the Distributorship agreement.

Q. What is the investment amount to start a gas agency?

Ans. The initial investment amount should be around 10 lakhs for rural areas and 15 lakhs for urban areas. But this may vary.