In order to start a new Econo Petroleum Garage the following needs to be done
- Investigation (Traffic Count, Volumetric Analysis, Economic Viability and Feasibility Study)
- Filling Station/Truck Park Facility Development
The site investigation is the much needed starting point of the development project and the scope of work will involve the following:
The economic viability:
Determine if the proposed development can acquire the minimum volume of sales, whilst also taking into account development costs.
The comprehensive feasibility:
Evaluate the risk and probability of obtaining the appropriate rights for the site, environmental requirements, road access and other. Evaluate the possibility of getting a site and retail licence from the Department of Energy according to the regulations of the Petroleum Product Act.
The development project is divided into three steps:
- The traffic count and volumetric analysis thereof.
- A preliminarily study of the physical and legal aspects attached to the property and conditions of the title deed.
- There might be conditions which must be lifted or adhered to.
- A preliminarily study to determine what the involved local and provincial authority’s future planning of the area is.
- Will a filling station fit in this planning or will the application of rights be difficult? Existing filling stations in the area or applications thereof already in process will be important factors as well.
- A preliminarily study regarding possible environmental issues
- A preliminarily study regarding road access and availability of civil engineering services.
- Financial projections and calculations.
- Socio-economic information and opinion on the chances of the approval of the site and new retail licences.
Only once the site investigation confirms the development feasibility of the filling station, may the developer move to acquire all formal permissions (town planning, environmental, engineers, required property rights and applicable zoning)
- Apply for the site and retail licences from the Department of Energy. The feasibility documents are included in the application process, as this establishes the pre requisites laid down in the Act.
- Formal negotiations with oil companies in terms of head lease, supply and branding agreements.
Licences: New Developments:
If there is not an existing retailing facility, then the development of this will be regarded as a New Development and a New Retail Licence, as well as an application for a New Site Licence must be submitted to the Department of Energy. In this process, the Controller ensures that there is a need for the business and that if the licence is approved, this facility will be economically viable and that the Business will promote the licensing objectives stipulated in section 2B(2) of the Act.
In order to determine economic viability, the Controller must be satisfied that the Business Plan and NPV (Net Present Value) have set out reasons for the viability of the concern and that the NPV has been correctly and accurately calculated and is positive. These two aspects present challenges to any applicant and the inaccuracy and incompleteness of these crucial aspects present disputes to the Department of Energy, as no licence can be approved if the criteria set out herein are not satisfactory.
An Application for a New Retail Licence must be submitted before fuel retailing activities can commence on a new site or in the event of an ownership change (or majority shareholding of a legal entity) of the retailing facility.
We can offer the following services to get you started!
- Feasibility Study (undertaken with reference to assessing the viability or otherwise of a new development and will include a basic traffic count as well as preliminary environmental study. Based on the Feasibility study, the client gets a better understanding of the risk factors before undertaking a costly venture)
- Environmental Impact Assessments/ Environmental Management Plans (This is dependent upon which fuel will be stored – petrol / diesel as well as the capacity required – whether it is 30 000 litres or more as different provisions apply per province)
- Traffic Studies/Traffic Counts
- Proof of Financial Provision (This is required in terms of the licensing process after Approval of the licence by the Controller and takes the form of an Insurance policy. Due to extensive contacts within the petroleum environment, we can facilitate this for the client as no new development will be approved in the absence of this requirement.)
- Bankable Business Plans
- NPV’s (Nett Present Value Calculations compiled by a professional. This is used by the DOE to determine the future financial viability or otherwise of the undertaking. This is a legislative requirement for every application.
- Branding Solutions (Each site will be assessed and a tailor- made solution will be presented identifying and catering for each retailing facilities requirements. This will include convenience stores/shops to attract additional volumes to facilities.)
- Buying and Selling of existing filling stations
(This will apply to all retailer owned and operated filling stations where we will facilitate the process by involving specialists to ensure parity within this environment)