How to Take a Gas Agency in India

Are you planning to take a gas agency? LPG dealerships have shown a high revenue potential in the last few years. The number of households that use liquefied petroleum gas cylinders has increased exponentially. Hence, starting a business as an LPG gas dealer can be a good scope.  However, what is a gas agency? How do I apply? What is the profit margin to open a gas agency? There are so many questions left unanswered. If you’re someone who is looking for such an answer, this guide is definitely for you.  We have organized the most-asked questions and shared the answers to help you make better decisions:

What is a gas agency?

A gas agency is an authorized business to sell LPG gas cylinders to its consumers. The businesses are generally a part of larger gas companies and supply gas cylinders to a specific region. 

Is Starting a Gas Agency Profitable in 2025?

This is the question people ask the most. And to answer it, yes, starting a gas agency is a profitable business in 2025. If you are familiar with the Pradhan Mantri Ujjwala Yojana, then you might know that the government is trying to promote the use of LPG gas cylinders.  The objective of the initiative is to provide cleaner fuel in every corner of India, including the isolated areas. So, how much can you earn from a gas agency? What is the margin of a gas agency? The answer to the question depends on several factors. For instance:

• The number of LPG gas users in your area. 
• How many competitors do you have
• The government regulation
• Global market demands and changes
• Seasonal demands
• The reputation of the gas company you have taken the dealership

What is the Minimum Investment to Open a Gas Agency

It depends on whether you choose a private or public gas company. The initial investment for a public gas company is generally less than for a private one. But that’s just the beginning.  The investment may vary depending on the area. The acquisition cost in urban areas is more than that in rural or semi-urban areas.  You should also consider whether you want to supply domestic gas cylinders or commercial gas cylinders. Customer service, transportation, and safety installation also add up to your expenses. We recommend increasing your budget to keep the supply running after the initial investment.  How much land do you need for a gas agency? Aside from all the above-mentioned factors, you need land for a godown to stock your supply. On that note, how much land is required for a gas agency? It’s a genuine concern, and here is the answer!  For public sector oil marketing companies (OMCs) like IOCL, BPCL, or HPCL, you need land with minimum dimensions of 25m x 30m for 8000 kg storage capacity. The location should be within 15 km of the town or village limits where you want to offer service. It must be in the same state.  However, please note that for private gas dealerships, the requirement may not be the same. To get a clear idea, please contact the gas company.

How to set up a gas business?

Now that you have an idea of how much money is required for a gas agency, here are the licensing and legal requirements you need to comply with:

• You have to be a citizen of India.
• You need to qualify for at least the 10th standard examination or equivalent from a recognized board. However, it does not apply to people from the Freedom Fighter (FF) category.
• Your age should be less than 21 and not more than 60 years. For locations reserved under the FF category, there is no such requirement. 
• You should not be a family member of an employee of OMC as of the date of application.
• You have to fulfill multiple dealership/distributorship norms with accuracy.
• You need basic documents, including an Aadhar card, PAN card, Proof of Address, etc.
• The dealership does not apply to those with proven cases of malpractice/adulteration.

Final Thoughts

Opening a gas agency can be a long-term investment, but it sure is worth it. However, you do need to research thoroughly and stay prepared to meet all the requirements. The budget can be an issue for some, but your business will run smoothly once you acquire it. 

FAQs

Q.1. Do I need prior experience to open a gas agency?

Not necessarily. But if you have some prior experience in sales or logistics, it may come in handy. You will be able to understand your consumer demands better and maintain smooth operations.

Q.2. Can I get a loan to start a gas agency?

Yes. The government is promoting a cleaner energy supply for cooking. Many banks offer business loans or Mudra loans for this purpose, so you can get a hold of the amount. 

Q.3. Is training provided by the parent gas company?

Yes. Since LPG gas is combustible, it is mandatory to offer training on safety. Many companies also educate you on how to manage operations and customer service.

Q.4. What safety measures should be in place at a gas agency?

There are quite a few things, you should have in your agency or godown, for intact: 

• fire extinguishers, 
• leak detectors, 
• ventilation, 
• proper storage, and 
• regular safety audits.

Q.5. Can I run a gas agency as a side business?

Well, it is a time-consuming and laborious job. But if you have dedicated staff and closely monitor the safety and service needs, it might be possible. 

Q.6. How long does it take to break even in the gas agency business?

See, no matter which business you’re running, it can be pretty hard to gain profit in the first year. For gas agencies, it can take about 1 to 3 years, depending on location, customer base, and operational efficiency.

Q.7. What is the renewal process for a gas dealership license?

As per the Commodities Act 1955 and West Bengal Cooking Gas Order, 1985 of the Government of West Bengal, you need to renew the license every year. The process involved is pretty simple though. Submit your renewal application with updated documents and safety compliance.