Startup Costs of petrol station.

Remmy

I'm just curious how much capital would be needed to get a petrol station running so that it is profitable? What would the main costs be? Do the oil suppliers operate a kinda franchise system that you buy into?

I pass by one that hasn't been in business for a year or two. It's under new management now and it seems to be mad busy. They are using a different oil supplier than the last guy and the shop has been upgraded.(new coffee machine counters, stock etc).

sandin

In the fuel business the money is only made on teh shop - get a location that will give you a good turnover of coffee/sambo and you'll make money.

A station gets about 4c-5c from a litre of fuel, take 1c out of that for credit card charges, do 50,000 litres a week and you will be lucky to have 2k to pay all expenses.

a 50k litre business will need at least 3 fulltime staff, so you now have €500, rent/rates will cost you 1k minimum, so now its -500. Hence the need for a busy shop to make the money.

Fuel suppliers will use direct debit - you'd need 20k litres of fuel (you can get deliveries up to 3 times a week) and a shop of stock + fit out. Ball park, you'd need 100k to start a medium size station that is already reasonalby fitted.

killiank

Its a tough tough business in my opinion. I deal with 12 service stations & almost all of them find it difficult to get by. Some of these however are struggling due to the high rents/leases that they signed up to during the good times. There are plenty of stations on the market at knock down prices from the boom. I know of one that was built for €1.5million & they consider now they would be lucky to get 400k for it. Ive come across a few options where the larger oil companies are looking at selling stations & then leasing them back from you.

Price changes in the oil industry are now a daily change in many of the companies I deal with. I would think you would need larger tanks than 20k litres if you want to be able to make a bit on the movements. I would think you would need 50k for fuel & then the shop stock really depends on the size of the shop.

Some companies are doing deals where they look after the fuel end of things & you just run the shop end of it so you don't need the capital to pay for the fuel. They set the pricing on the fuel & pay you say 2c per litre sold.

killiank

sandin wrote: »

A station gets about 4c-5c from a litre of fuel, take 1c out of that for credit card charges,

Also need to consider stock losses. You lose somewhere between 0.3% & 0.7% on average on fuel. You can look everywhere you want but it disappears into thin air - vapour loss/heating losses. Just worth considering in my opinion

Remmy

That's interesting thanks for the replies. I had the belief that there was much more of a margin to be made on the actual fuel sales.

RATM

Remmy wrote: »

That's interesting thanks for the replies. I had the belief that there was much more of a margin to be made on the actual fuel sales.

Yeah given that it can cost as little as $5 to get a barrel of light sweet crude oil out of the ground and then another few dollars to refine it to petrol I wouldn't blame you for thinking that way. But the oil companies have it sewn up and all the profits remain with them- I really feel sorry for petrol station owners as I'd say the majority of the public think that they are ripping us off whereas the reality is they are on a breadline themselves and it is the oil companies, via their OPEC cartel, who are creaming it.

Bandara

If your genuinely serious about this (as against just curious and kicking tyres) I can answer whatever you want to know.

the Petrol Station/Shop business is my core area. The numbers been given here are way off

Remmy

Hammertime wrote: »

If your genuinely serious about this (as against just curious and kicking tyres) I can answer whatever you want to know.

the Petrol Station/Shop business is my core area. The numbers been given here are way off

I'm curious about the nature of the business and how it works. I don't have the money to do anything about it for a few years but at least I can be gathering information. What numbers are way off?

Thanks for posting btw.

Dj320

Hi hammer
Just looking at your past threads on this, your obviously a station owner like myself, I have a few questions for you. I am currently in the planning end of a new build and wondering will I go with a oil company and shop franchise, it was a long time ago since I was with an oil company and in those times it was the oil company that had all the profits, I was just wondering if you had any thoughts on this??

Santan

Has anyone any recent advice on this business model, thinking of buying a premises that will need a full make over, but has potential I think.

beertons

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