Obtaining Petrol Pump License in Nepal-2026
A. Background:
To make arrangements for the sale and distribution of petroleum products, including petrol, diesel, and kerosene in an orderly and transparent manner, and to ensure an environment in which the general consumers may access and use such products in an easy, simple, and uninterrupted manner, Nepal Oil Corporation Limited (the “NOC”) provides a dealership license to the private entities all over the Nepal. The NOC has classified dealership into Model Pump Dealership, General Dealership, Petrol Dealership, Packed Dealership and Kerosine Dealership. This article outlines the governing laws, legal requirements, and procedures to obtain the Model Pump Dealership in Nepal.
B. Legal Framework and Governing law in Nepal
The Governing laws regarding the Model Pump Dealership are as follows:
- The Petroleum Act, 2040
- The Petroleum Rules, 2041
- The Petroleum Product Dealership Bylaws, 2075
- The Nepal Oil Corporation Act, 2026
- The Environment Protection Act, 2076
C. Model Pump Dealership:
A Model Petrol Pump (Namuna Petrol Pump) refers to a modern, high-standard fuel station equipped with advanced infrastructure, enhanced facilities, and comprehensive customer services that exceed the standards of a conventional petrol pump. To qualify as a Model Petrol Pump, the facility must satisfy specific criteria relating to land area, accessibility, location, and infrastructure, as outlined below:
S.N. | Category | Requirement/ Standard |
1. | Land Area-Terai/Inner Madhesh | Minimum 1 Bigha (13 Ropani); Road frontage at least 40 meters |
2. | Land Area – Hilly & Himalayan | Minimum 5 Ropani |
3. | Access Road to site | Minimum 10 meters wide from highway/road to site |
4. | Distance from Highway | Site must be within approximately 500 meters of a highway or major road |
5. | Approach road and pump yard surfacing | Public road boundary to pump yard must be paved with RCC, stone-set cement, or interlocking tiles |
6. | Compound wall | Minimum 3 feet, maximum 5 feet high on three sides of the site |
7. | Canopy (Refueling area cover) | Minimum 12 m × 12 m canopy covering the refueling area |
8. | Toilets – Male | Minimum 6 urinals + 2 toilets |
9. | Toilets – Female | Minimum 2 toilets + 1 disability-friendly (accessible) toilet |
10. | Drinking water | Clean drinking water supply available at the station |
11. | Power supply (UPS) | Uninterrupted power supply using solar energy + battery backup |
12. | Electrical wiring | Concealed (conduct/kanshil) wiring throughout the station |
13. | Drainage system | Proper drainage system inside the compound |
14. | Fire safety | Fire retardant system installed at the station |
15. | Emergency shut-off | Emergency shut off system installed for sensitive/emergency situations |
16. | Dispensing pumps | New dispensing pumps with full specifications; minimum 4 petrol nozzles and 4 diesel nozzles operational simultaneously |
17. | Tank interconnection Rule | Interconnection between tanks storing the same petroleum product is NOT permitted |
18. | Separate tanks per product | Each petroleum product must have separate storage tanks with separate dispensing pumps |
19. | Underground storage tanks | Cylindrical steel tanks; minimum 12,000 L capacity each; steel sheet minimum 5mm thick; interior: Primer + Epoxy coating; exterior: Coal Tar Epoxy or similar bituminous coating |
20. | Tank manhole | Minimum 22-inch manhole cover on each underground tank |
21. | Double – walled tanks | Required in areas with high groundwater table; Double walled steel, fiber glass, or jacketed steel tanks to be used |
22. | Tank fittings | Each tank must have: venting, fuel inlet, Outlet, Gauging hole, and sump for water/sludge removal |
23. | Suction foot valve | Suction foot valve must be installed minimum 6 inches above the tank bottom |
24. | Fuel suction foot | Fuel suction pipe must be installed at least 1 m away from the fuel inlet point |
25. | Tank farm area | Tank farm area must be open (no buildings, floors or roof structures over it) |
26. | Automated billing system | Automated/digital billing system required |
27. | Card payment (card swap) | Card swap facility for electronic/card-based payments |
28. | Digital price display | Digital display board showing retail prices of all petroleum products and goods/services |
29. | Vending Machine | Vending machine and convenience store facility at the station |
30. | Refreshment house/ cafe | Seated refreshment area (café/house) accommodating minimum 20 persons |
31. | Parking Area | Minimum 500 sq. meters parking area for at least 20 vehicles (small and large) |
32. | Service center | Car wash, tire inflation (air filter service) and basic vehicle repair/maintenance services |
33. | Security | 24/7 security guard arrangement at the station |
34. | ATM Counter | ATM counter provision at the station |
35. | Static charge/earthing safety | Bonding and earthing wire with fittings during tank truck unloading to prevent static charge ignition |
36. | Safety information display | Safety- related information must be prominently displayed for all to see |
37. | Hoarding board | 20 ft ×4 ft board, blue lettering, NOC logo in red, as per schedule-10 format |
38. | Sign board | Minimum 5×3 ft sign showing: authorization date, authorized dealer name in blue lettering with NOC emblem |
39. | Layout display | Underground tank layout, pipe fittings layout and current product stock details publicly displayed at the station |
40. | Layout Submission | Station layout must be made available to NOC or authorized government authority upon request |
41. | Operating hours | Station must be open 24 hours a day, 7 days a week |
D. Process of obtaining dealership for the Model Pump Dealership:
a.Submission of an Application: Interested applicant shall submit an application along with the following document:
- A certified copy of the site plan of the proposed outlet clearly showing Chhar Killa, the blueprint of the map, description of the trace map, and the boundaries of land plot of the said retail outlet site duly certified by the concerned Survey Office.
- If the site covers one or multiple plot numbers (Kitta Number), a certified Survey Office document showing the combined plots, total area, and clear length and breadth measurements.
- Certified verification of the actual land dimensions (length and breadth) by a qualified technical authority/person.
- If there is any discrepancy between the trace map area and the actual land area, a corrected certificate from the concerned office.
- A recommendation letter from the concerned local government, clearly specifying Chhar Killa, plot number (“Kitta Number“), and area of the proposed outlet site.
- A recommendation for the sale and distribution of petroleum products issued by the concerned local government.
- A certified copy of the land ownership certificate (Lalpurja).
- Where the land of the retail outlet does not belong to the entity, a written lease agreement between the landowner and the proposed applicant for a minimum period of ten (10) years.
- Certified copy of the citizenship certificate of the Landowner.
- A certified copy of the citizenship certificate of the directors and shareholders.
- Application fee should be deposited NPR. 50,000.
b.Initial Examination of an Application by the NOC:
c.Preliminary Site Inspection by the NOC:
d. Letter of Intent (“LOI”) regarding appointment of dealership:The Applicant should submit additional document within the 90 days period of time after the getting the notice of site inspection by NOC with the following.
- A recommendation letter from the road authority whether it is a Federal, Provincial, City, Municipal, or Irrigation Road where the petroleum pump will be located.
- Certified Copy of the registration certificate of the entity.
- A recommendation letter from the concerned Traffic Office or Police Office.
- A recommendation letter from the Electricity Authority.
- Kabuliyatnama
- Self-declaration letters
Within 30 days of the submission of the above documents, the applicant is required to deposit a bank guarantee of NPR 10,00,000 in favor of NOC in the designated bank account.
e. Development of Infrastructure: Upon issuance of the Letter of Intent (“LOI”), the applicant is required to commence and complete the development of the retail outlet infrastructure in accordance with the prescribed standards and within the timelines specified below:
Stage | Requirement | Timeline / Condition |
1.Initial Development Period | Complete the construction and development of all required infrastructure in compliance with the standards | Within 365 days from the date of issuance of the LOI. |
2.Application for Extension | If the infrastructure cannot be completed within the initial period, the applicant must submit a written request for an extension. | The request must be filed at least 15 days before the expiry of the initial 365-day period. |
3.First Extension | The regulatory authority may grant an extension after assessing the progress of the development works. | Up to 180 additional days, subject to deposit of an amount equivalent to 10% of the bank guarantee. |
4.Final Extension | Where completion remains impracticable despite the first extension, a further extension may be considered upon demonstration of reasonable grounds. | Up to 180 additional days, subject to deposit of an amount equivalent to 50% of the bank guarantee. |
5.Non-Completion | Failure to complete the required infrastructure within the permitted extension period will result in cancellation of the approval. | The LOI shall automatically stand cancelled. |
e. Final inspection of Infrastructure:
- After completing infrastructure, applicant must submit application with final approval letter issued by road authority and VAT registration certificate to the NOC.
- Upon application submission, NOC forms 3-member inspection committee. Such committee inspects infrastructure against standards and requirements and submit the inspection report within 15 days of site visit.
f. Informing Applicant to receive the petroleum suppliers:
g. Licensing: After the completion of all these processes the applicant will get License of Model Pump dealership.
E. Renewal of the License and Process:
The license will be valid for only 3 years. The applicant shall submit the license renewal application at least one (1) month before to the expiry date of the license.
F. For seller Minimum Distance to establish Petrol pump:
- The regulations set minimum distance rules of 10km between petroleum retail outlets based on seller type, exempting government and kerosene sellers.
- The proposed retail outlet shall be situated at a road distance of not less than two kilometers from the international boundary of Nepal.