How To Start An Oil Business in the Philippines (Opportunities from the Big 3)

As a developing country, the Philippines is known as a major consumer of energy-related products such as gasoline and diesel and yet we only produce a fraction of our own, which is really not enough for domestic consumption. That is why we rely so much on imported petroleum products to help us power our growing industries and population. And like food, fuel is one commodity that man (his machines, to be precise) can’t live without — or so it seems.

For a long period of the Oil Business in the Philippines was dominated (some say monopolized) by companies collectively known as the Big 3 — Caltex, Petron and The Pilipinas Shell. Thanks to the Oil Deregulation Law ( Republic Act No. 8479 of 1998 ), some smaller and independent players have emerged bringing benefits to the consumers, serving farther locations in the countryside and more opportunities for those who want to be in business.

Do you want to know how you can take advantage of the various business opportunities in our local Fuel Industry? You have come to the right place. More specifically, we’ll show you how you can become a distributor of well-known brands of the country’s three biggest oil companies.

What’s In Store For You, The Businessman

For smaller businesses, running their own petroleum business basically means becoming a franchisee of a known company or becoming a retailer. Either way, you will be carrying the trade name of the mother company, you will be sourcing majority of the products from them and you will have their support, too. Different companies will also have their respective business opportunities which you can choose from, but basically they fall under the following categories:

  • Gas Station (includes gasoline, diesel, motor oils, lubes and lubricants, etc )
  • Gas Station plus Convenience Store
  • Gas Station plus Automotive Shop (plus, maybe, a car wash)

Obviously, petroleum is your main product.

Opportunity #1: A Caltex Gas Station

The Caltex brand is backed by Chevron Corporation, which one of the global leaders in the energy industry.

For a minimum investment of P 5M for facilities and equipment, you can become an oil retailer of Caltex. Of course, you will need to set aside an amount for your initial operations.

Running a your own Caltex Gas Station as a retailer of Caltex Products means you are in partnership with a trusted and highly recognized brand.

Here are some of the advantages of being a Caltex Retailer:

  • Caltex will appoint a Business Consultant who will help and support your venture.
  • Chevron Engineers will be available for consultation of your initial site design and construction
  • Trainings are available to help you enhance your business skills as a retailer.
  • Marketing and other support services.
  • Business Signages will be provided by the company.

How To Become A Caltex Retailer

You need to submit an application with your site and the company will contact your for their initial evaluation.

Here are the steps to take:

How To Become A Caltex Retailer

For more information, visit their website at http://www.caltexforinvestors.com.

Opportunity #2: A Petron Service Station

The Petron Corporation is the country’s big daddy in the energy sector. It supplies nearly 40% of our nationwide fuel consumption. And it also owns an oil refinery plant which processes crude oil and turn it into various petroleum products which can be distributed to the service stations and used by the end consumers.

On the business side, Petron offers the following opportunities that you can tap:

  • Run a gas station.
  • Distribute LPG. In some cases you can also carry this product line in your gas station.
  • Own an Automotive Service Shop under the Petron Car Care Center brand.

Let’s focus on the first one.

For those interested in distributing Petron products, there are basically three types of Petron Gas Service Stations available:

  1. Company-Owned Service Station
  2. Dealer-Owned Service Station
  3. Micro Filling Stations aka Petron Bulilit Station (perfect for micro-entrepreneurs)

Petron Bulilit Gas Station

A Petron Bulilit Gas Station. This one is perfect for micro-entrepreneurs in the Philippines. It is best to set this up in the under-served areas in the countryside.

They are all basically the same, but they differ on the size of the station, the investment requirements and the number of pumps (maximum of three pumps for the Petron Bulilit Station).

The capital requirement ranges from P 1M to P 9M depending on the size of the service station. To become a dealer, you have to undergo a three-phase selection process which consists of: Screening, then Training, and finally Project Implementation Phase.

For more information, please visit the Petron Corporation’s website at petron.com.

Opportunity #3: Pilipinas Shell Retailer (A Franchise Business)

Pilipinas Shell Petroleum Corporation “refines, blends, transports and sells a wide range of high quality fuels, lubricants, bitumen and other specialty oil-based products.”

As a Shell Retailer, you will be operating under the trade name of Shell. This gives you the opportunity to use the company’s logos, trademarks, signages and other Shell-related symbols that are easily recognized worldwide.

Well, actually Shell offers a franchise opportunity with a twist: there is no franchise fee. However, just like any franchise operation, you will have to pay a royalty fee and retailer’s fee every month. The initial investment at the time of this writing ranges from P 3M to P 5M and covers the fuel supplies, station equipment and other things related to the operation of the business.

(See also: 5 Factors to consider when buying a franchise.)

How about the convenience store and other business opportunities from Shell?

Good question. If you happen to notice, some Shell Petrol Stations have a Convenience Store (under the Select brand), or Automotive Service Shop. As a Shell Station Franchisees you will have to apply for those separately.

Furthermore, Pilipinas Shell is proud to declare that dealers can expect an average Return On Investment of 30% to 40% with an average pay back period of 2 to 3 years.

For more details on the Shell Franchise Opportunity, please visit their website at www.shell.com.ph.

Other Business Opportunities From Small Players

Up next, we’ll be showing you the other dealership and franchise opportunities from smaller oil companies like SeaOil, Phoenix Petroleum, FlyingV. You may be amazed to discover that it really doesn’t take that much capital to put up a gas station carrying the brands, products and services from these companies.

Comments

    • says

      Hi Eya,

      How about just leasing your lot to a potential gas station franchisee?

      Or, maybe you can be the franchisee yourself (or your company) and then secure a business loan from a bank?

      Just some insights. :-)

  1. shine says

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    0915-535-5077 shine

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