How Does One Start a Petrol Station in South Africa?

How Does One Start a Petrol Station in South Africa?

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1Starting an independent filling station

Engen Petrol station

South Africa petrol stations fall into two categories, independent and franchise operations, both of which are funded in the same way.

Independently owned garages still play a big roll in the South African economy. According to South African Petroleum Retailers Association (SAPRA), who represents all the stakeholders in the petroleum industry, before a new filling station can be opened, three sets of approvals, authorisations and licenses are needed.

  • Land use rights for purposes of a filling station;
  • An environmental authorisation; and
  • Site and retail licenses.

In terms of the Petroleum Products Act, 1977 (PPA) as amended in 2006, and which is administered by the national Department of Energy, one cannot apply for a site and/or retail license before you have both land use rights and an environmental authorisation.

More on the Government Funding Options Available to You

Existing filling stations are in a particularly strong position because of the PPA which controls the energy authorities to ensure that the number of filling stations is appropriate to local sales volumes and does not exceed the optimal number for an area.

2Franchise operations

Petro companies in South Africa

Petro companies (Engen, Sasol, etc) offer franchises which include intensive training programmes and stipulations for franchisees. Sasol, for example, will mentor and promote franchisees on a monthly basis and assist the franchisee throughout the process. and visit each month and provide support and guidance.

“It isn’t difficult to get a franchise as long as you have funding. A Sasol filling station franchise costs in the region of R1 million”, says Able Mokoena, Franchise Consultant for Sasol.

“If you have your own site, then Sasol will undertake an inspection of the site before proceeding. Licences are required which are included within the franchise agreement”.

3Franchise concept comprise of separate business units

BP petrol station

Often, depending on the franchise company, the concept could comprise of separate business units such as the forecourt, a convenience store, a bakery, car wash or a quick-service restaurant. These can be added under certain conditions.

Each business unit has to adhere to individual standards for methods of operation, service levels, management, profitability and continuous training of staff. Most importantly, each unit is regarded as an individual profit centre, and may not be run at a loss and be offset by the other units.

After extensive market research, the franchisor determines which business units are suitable for the particular site and grants a licence to a single franchisee to operate the entire outlet.

Before you sign an franchise agreement understand clearly what franchise royalty fees, penalty clauses, support, training, and requirements you are responsible for or will receive.

The Franchise offers a certain name brand of petrol related products, which are subject to the rules and regulations of the franchisor.

Make sure that all licenses, agreements, and permissions are in place. These should also be a pre-condition in the purchase offer. Find out where the competition is located, what services they offer.

4A business plan is a must

Business planning advice

Create a working business plan. Make sure you include a provision on monitoring cash flow. Also, include marketing techniques to promote the filling station. Without one, you won’t be able to apply for funding.

Download a Free Business Plan Template Here

5Raising money

There are many different ways to cook an egg and the same applies to raising funds to start a petrol station, or for that matter, any new business. If traditional options such as banks and private funders don’t work, consider the possibility of collaboration with a group of investors. Visit the following links for guidance:

  • Overcoming financial hurdles
  • No capital, no collateral, no problem
  • Where to get the money

The petrol retail price is regulated by government, and changed every month on the first Wednesday of the month. The calculation of the new price is done by Central Energy Fund (CEF) on behalf of the Department of Minerals and Energy (DME).

The petrol pump price is composed of a number of international and domestic elements. The international element, or Basic Fuel price (BFP), is based on what it would cost a South African importer to buy petrol from an international refinery and to transport the product onto South African shores.

Then a number of other elements are added to reach the final price such as Fuel tax, Customs & Excise levy, Slate levy, Retail margin and the Road Accident fund.

6Motivation

Africa’s Greatest Entrepreneurs

If you are thinking of starting a filling station you should read Africa’s Greatest Entrepreneurs by Moky Makura, (2008) published in paperback by Penguin Books. It tells the story of T K Mmusi, a man armed with little knowledge or experience, who started a Total petrol station in Botwana.

Its success provided the capital to start Pula Carriers, a logistics company with a fleet of 20 tankers, each one fitted with state-of-the-art technology. Today, Pula Carriers is a major distributor of fuel in Botswana.

How to Start a Fuel Transportation Business

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  • xolani

    I Got a very excellent land, on the road but I don’t have that 1mil to buy or to start a filling station franchise.

    • Zeyn

      where is this land?

      actual start up cost for Sasol is R4.150million, you need 60% of your own money

      • Jerry Purfz™

        Good day Zeyn.

        Do you know more about getting all the paperwork prepared for applying for this type of a franchise? Please get hold of me here: jerry@jerrypurfz.co.za

    • Jerry Purfz™

      Yeah… Where’s this land.

    • Seamesh Harrioersad

      hi xolani, you can call me on 0727107338 or email me seamesh01@gmail.com

      • Simphiwe

        Hi Seamesh, I have an excellent piece of land for a petrol station along a busy provincial route and currently looking for an interested party to establish a petrol station on the site. If you are still in the market fo land please contact me on simphiwemlotshwa@yahoo.com

  • Rosen Mhlongo

    Hi, I am from a rural area in Limpopo, Giyani, Charlie Rhangani Village, and want to know more about getting all the paperwork prepared for applying for filling Station franchise? Please assist?

    • lawrence

      I am in giyani too can you call me 0820499552

  • nqobile

    I need to start a petrol station what thing must i do plz help mi

  • Seamesh Harrioersad

    hi xolani whats your contact details

    • Wetsi Derick Moloi

      HI Seamesh, please contact me on 0847321006 i have land and great positioning, need help with financing. thanks I am really serious and comitted

      • Anesh Maharaj

        Hi Wetsi

        I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station. If you have a good piece of land i have the investors. You can contact me on anesh42@gmail.com

      • Bongani

        Hi Anesh….I wish you had placed your request earlier. I am currently staying in an area where there is growing business opportunities. Some how one guy (if correct) managed to establish two fuel stations in this area. I just missed it because I had no finance or anyone to help, pity.

        Nevertheless the area is very ripe for business, especially a fuel station as its very populated and still has space available at the center for one more station. Close to taxi’s and local communities.

        Please advice who can I talk to or who can assist. Its sucks if you have an idea and no one or enough money to establish the concept.

      • Bongani

        Wanted to take the route of an independed fuel station, however franchise at the moment is still better due to continous training and mentoring programmes.

      • LeboT

        Hi Anesh, please contact me on 0741019497

  • Buyi Lando

    Hi….I’m Buyi and I have a land in kzn (rural areas) which is in the main road and I would like to open a filling station as I have noticed that there is a business opportunity in that areas. My email address is Buyiswal9@gmail.com

  • Sanele Mtshali

    I am a management consultant. I have a client who wants to remove a certain company’s tanks and replace with a new one. I am busy trying to find the how, paperwork and money involved. I am guessing this is a new franchise altogether.

    • Anesh Maharaj

      Hi,

      I am from one of the leading oil companies in South Africa. I am looking prospective land to invest in a filling station. If you have a good piece of land i have the investors.

      • Sanele Mtshali

        Please specify if you are seeking land for sale so you can establish a filling station or you looking for someone who owns land that can be used for such purposes. If the latter is correct than how would that person be compensated?

        I can help you find land only if we come up with a plan in terms of compensation and criteria.

        Thank you

        *Sanele Mtshali*
        Cell: 076 122 3199
        E-mail: *mtshalisanele@gmail.com *

      • Anesh Maharaj

        We can do it either way. For the person who owns the land there is a development rental that can be organized

      • LeboT

        Hi Seamesh,
        Please contact me, I have sent you an email with my contact details

      • Sydney XV Mck-o

        Please get hold of me via email. sydneymakololo@hotmail.com

  • Sipho Khanyile

    We a land to start a petroleum station in KZN North, where to start?

  • jabu

    Any one who needs help with getting paperwork and sourcing of finance for a new filling station can contact me on 0621354473. We can assist with business planning, market research, EIA application, site licenses, and application for finance.

  • Rahiim Phillip

    Hi All, Please feel free to contact me regarding diesel Supply. I am an independant supplier of diesel and i am sure we can work out a rate that would be mutually beneficial. Please email me: ray.phillip@live.co.za

    • lawrence

      Hello I want to have a filling station can you be my potential diesel supplier

  • Anesh Maharaj

    Hi
    I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station or existing service stations WITH land for sale. I will also be interested in white / de-branded sites with land for sale. I can be contacted on anesh42@gmail.com

  • Anesh Maharaj

    Hi
    I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station or existing service stations WITH land for sale. I will also be interested in white / de-branded sites with land for sale. I can be contacted on anesh42@gmail.com

    • Anesh Maharaj

      Hi
      I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station or existing service stations WITH land for sale. I will also be interested in white / de-branded sites with land for sale. I can be contacted on anesh42@gmail.com

  • _missmajola

    I need more info concerning a petrol station franchise. Who do I communicate with? How do I get ahold of them,amongst other things. I can be contacted on TSmangele.Majola@gmail.com
    Thanks

  • tumelo

    Good day. I also want to start a filling station but I just want to know how to obtain the license? Iam from bloemfontein. My email address: moipone.m@webmail.co.za

  • Sanele Ndabayakhe Vilakazi

    I’m Sanele, I have a land which is very busy near the main road n a mini circle, so I want to stat a petrol station, can I get some help people… Email at sanelevilakazi0@gmail

  • Zukisani Sithetho

    Hi, I want to know more about getting all the paperwork prepared for applying for filling Station franchise? Please assist.

  • Anesh Maharaj

    Hi
    I am from one of the leading oil companies in South Africa. I am looking for prospective land to invest in a filling station or existing service stations WITH land for sale. I will also be interested in white / de-branded sites with land for sale. I can be contacted on anesh42@gmail.com

  • Thabiso Destan Ndlela

    how many square meters is needed to be able to build a garage?

  • Thabiso Destan Ndlela

    how many square meters is needed to be able to build a garage?

  • Sanele Ngobese

    Hi, I am Sanele Ngobese , from a rural town of Nqutu in KZN I want to know more about starting a filling station on a busy main road, and getting the paperwork done but firstly I need to know what the first step to take in this process.

    • Barend

      Hi Sanele
      have you gotten any answers regarding the paperwork?

      • Sanele Ngobese

        No I haven’t, you can send me the details on my e mail address at sanelengobese62@gmail.com
        thanks in advance.

      • letho

        Hi Barend
        I also need assistance in getting the paperwork as i am still researching more about opening a petrol station in my Township at Esikhawini. my email is lethokuhlemyeza@gmail.com

  • Willie Swart

    If you need assistance with development of a new site mail me at: info@euroland.co.za

  • lindiwe mbambo

    I would like to start a petrol station myself i have seen how people struggle in my area, i have an idea but no finance no land but i am willing to explore all avenues possible to make my dream come true if anybody has any knowledge and advise please do contact me on my email – lindiwembambo91@gmail.com

  • Thobs

    Company registration and accounting services offered:

    Pty ltd, NPO, NPC’s and many more services rendered. Please email designolf@gmail.com

  • Tertius

    Hi i have a land which is close to a busy road in Mpumalanga Nkomazi district i am looking for an inverstor i already have half of the money needed to franchase for the petrol station. Email me at tertiusndwandwe@gmail.com

  • Tertius

    Hi i have a land which is close to a busy road in Mpumalanga Nkomazi district i am looking for an inverstor i already have half of the money needed to franchase for the petrol station. Email me at tertiusndwandwe@gmail.com