When it is time to expand their retail presence in a state, all Government Oil companies start by releasing an advertisement. A notification for this advertisement will be usually published in at least two regional language newspapers and one English language newspaper. Additionally, notifications will be published through social media and official websites of the oil company.
The advertised locations are usually hosted on separate websites so as to not disrupt the main website due to high traffic flow. For example, IOCL, BPCL and HPCL for 2023 advertised through Petrol Pump Dealer Chayan while MRPL advertised through their MDSP platform. The main application page usually has fewer details such as Serial number, District, Type of RO, Category and mode of Selection. However, for detailed information of the advertisement, applicants may make use of a ‘Detailed Advertisement List’ available as a pdf file.
Before the reading the advertisement, read how to set up an Govt. Petrol Pump in India?
In this article, I will explain parts of the advertisement in detail for people who are not in the know-how.
Serial Number , Location name and District
The advertisement starts with the serial number or location number. While it is easy to overlook this section, it is important for any applicant to write down their location numbers clearly. OMC advertisements are usually expansive with multiple locations in the same area, and it is difficult for Sales Officers to remember all the locations. Instead, for internal communication they usually go by the location numbers. When officers are dealing with multiple advertisements, it also avoids confusion as another location stretch may have been called near the same area in previous years.
The next and perhaps most important part of the advertisement is the location name. Location names or stretches are usually well-defined and easy to read to avoid any confusion for the common people applying to them. Usually, the stretch will involve the name of the road, a starting landmark and ending landmark. For example, On NH 544 LHS, From Mar Gregorios Orthodox Church, Kanjikode To Village office, Marutharoad. Here, the LHS refers to the Left Hand Side of Road when coming from Mar Gregorios Orthodox Church, Kanjikode going towards Village office, Marutharoad. For places where specifying two landmarks is not possible, advertisement may be added within so much kms from a single landmark or even as within a corporation or municipality area. For example, within 3 kms from Kavottumukku Junction on St Andrews Road, and On Calicut Town 1 Within Municipal Limits.
As an applicant, it is pivotal that you verify and confirm whether your plot comes within the stretch. Even if your land is few meters outside the stretch, the oil company will reject it during Land Evaluation (LEC). Additionally, verify the district in which the location is advertised. It is possible for two locations with the same name to be found in very different districts. This is especially true for locations in the border of two districts.
Type of RO, Type of Site, Category and Monthly Expected Sales Potential
The type of RO in a petroleum advertisement refers to either Regular or Rural Outlets. Regular outlets are outlets which are set up in any highways (National Highway, State Highway and such) and Municipal limits of towns and cities. Cost considerations in regular outlets, including infrastructure development and fees are usually higher than that of rural outlets. Rural outlets, as the name suggests, are retail outlets set up in rural areas not coming under highways or municipal limits.
Type of Site refers to the ownership and operational control of the site. COCO (Company owned company operated outlets) are both owned and operated by the oil company. This is not usually advertised in consumer RO advertisements. Instead, CODO/CC (Company Owned Dealer Operated) or DODO/DC (Dealer Owned Dealer Operated) are advertised.
In CODO outlets the company will invest necessary infrastructure, and the dealer solely has to handle manpower, fuel and financial management aspects. CODO outlets may either be allotted through Bidding (where applicants bid for the rights to run the outlet) or through CFS reservation ( Corpus Fund Scheme outlets reserved for Scheduled Caste (SC) and Scheduled Tribe (ST).
In the case of DODO outlets, both the construction and management will be through applicants or dealers. This gives greater ownership to the dealer and chances for him to have greater control of allied businesses within the outlet.
If a location is called for a specific category such as OBC, SC, ST or even CC1, only people falling under that category will be eligible to apply. All relevant documents will be sought in this matter, and they will be heavily scrutinized during various processes under the dealer selection.
Finally, it is important for applicants to go through the expected monthly potential of the stretch and match it to the margin and investment. Most of the time, oil companies publish conservative estimates to factor dynamic market conditions. Applicants, especially living in the locality of the advertised location, may be more in tune with the feasibility of said location. They may use their own market intelligence to correctly understand the feasibility of the stretch advertised.
Rent, Minimum Dimension and Finance to be arranged
For CODO or CFS sites, the oil company will pay the applicant (in case of sublease) or land owner (in case of direct lease) a specific rent each month. The advertisement will mention the rent per square meter applicable for such sites. Usually, an annual increment of 2% will be applied but this is subject to policies of individual OMCs. The square meter rate will be applicable on the actual land taken over by the company and not the minimum land dimension mentioned in the advertisement.
All applicants must adhere to the frontage, depth and total dimension norms stipulated in the advertisement. Due to changing PESO, Townplanning and CPCB guidelines, it is always advised to give more land in the application and your land offer/lease than the minimum advertised. This will ensure all statutory guidelines are met and minimal congestion is present inside the RO. In no case shall the plot offered by applicant be lesser in dimension than that is advertised, i.e. the frontage, depth and total dimension should not be lesser than what is requested in advertisement.
The section ‘finance to be arranged by the applicant’ indicates an approximate amount of investment that the applicant has to expect for construction and running of RO at the stretch. This includes an estimated working capital requirement (mostly includes the fuel to be taken) and estimated fund for infrastructure development (such as canopy, sales building and Generator). These sections are usually marked as nil for CFS sites as the company will provide Corpus Fund Scheme Loan for initial working capital and infrastructure development also comes under the scope of the company.
Mode of Selection, Fixed Fee/Bidding Amount and Security Deposit
Mode of Section in most OMC advertisements will either be written either as DOL or Bidding. DOL means that the selection will be done via Draw of Lots in case there are multiple applicants in the same Group. For example, if there are three Group 1 applicants for a particular location, then a draw of lots will be conducted. In case of Bidding sites, A ‘closed bid’ amount will be collected from applicants and the applicant with the highest bid will be selected when the bids are opened. Bidding sites are usually advertised when the company is calling for non-CFS CODO (Company owned Dealer Operated) sites.
For all non-CFS DODO sites there will be a non-refundable fixed fee which is payable to the company. This is usually 15 lakhs for Regular sites and 5 lakhs for Rural ones. In case of bidding sites, the bid which was quoted during the time of application will be required to be paid. Fixed Fee/Bidding Amount is usually collected post receipt of all NOCs, including DC-NOC.
For all sites including a CFS, an interest free security deposit amount is also collected. 10% of the amount is collected as Initial Security Deposit (ISD) from the applicant immediately after getting selected (before LOI) and the rest is to be paid just prior to signing the dealership agreement (usually post construction).
Hope you have got a decent idea on how to read the retail outlet advertisement that various OMCs publish. Use this to make informed decisions while applying for Petroleum retail outlet. However, also make sure to talk to your respective sales officers for specific requirement or queries.
Read More: MRPL to bring out Retail Outlet advertisement in Kerala!
