How to buy a petrol station

Buying a petrol station can generate healthy profit margins, but there's a lot to consider.

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Rebecca Pike

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Key takeaways

  • Depending on the size, location, amenities and many other factors, buying a petrol station could cost you anywhere between $90,000 and $3.5million.
  • You'll need to decide if you buy the freehold or the leasehold, as well as whether you want a franchise or independent petrol station.
  • If you're eligible, you can take out a business loan to buy a petrol station.

How much does a petrol station cost?

Buying a petrol station ranges from roughly $90,000 to as much as $3.5 million.

The price will depend on the location and the size, as well as the amenities it comes with (many have workshops or car washes attached to them and that will drive the price up). It will also depend on the profitability of the business and whether you're buying the land as well (freehold) or just the business (leasehold).

It's not just the price of the business itself that you need to think about. You'll also need to arrange a site assessment report from your state's Environment Protection Authority (EPA), which can be a significant cost.

Preparing to buy a petrol station

Since there are so many factors that can influence the price, it's important to have the business properly valued before you buy. You'll need to consider the following:

  • Previous years' financial statements
  • Physical assets (petrol pumps, machinery, buildings, equipment, stock, etc)
  • Other assets, for example, intellectual property or business goodwill
  • Registration papers and permits
  • The business lease
  • Market conditions, including competition in the local area
  • Sales reports and forecasts
  • Business plan for future growth
  • Employee skills, experience and pay rates
  • Supplier details and arrangements

Finder survey: Have many Australians have considered a franchise business?

Almost a quarter of Australians we surveyed (23%) said they had considered starting a franchise business.

Response
No77.29%
Yes22.71%
Source: Finder survey by Pure Profile of 1145 Australians, December 2023

What factors should you consider when buying a petrol station?

Thinking of buying a petrol station? There are a number of things to consider, including the following:

  • Your fuel supplier. Most people who buy a petrol station enter into a franchise arrangement with United Petroleum, Caltex, Shell, 7-Eleven or another major provider. Under a franchise arrangement, the tanks, pumps and lines are the responsibility of the parent company. If you are opting for a franchise agreement, ensure that you read the terms thoroughly prior to signing a contract.
  • Negotiating a lease. Negotiating the terms of your lease with a seller, if you opt for a franchise arrangement, will often help you to secure a better deal. Make sure you carefully consider the lease terms before you sign on the dotted line. If you're not a born negotiator, you may be able to find a third-party provider to negotiate on your behalf.
  • Going independent. If you don't want to join with a major brand, you could consider buying an independent service station. While this means you don't have to answer to a major conglomerate, it also means you don't get the support with marketing, fuel shipping and setting up your service station that you could expect from a major brand.
  • Your experience. If you want to qualify for petrol station finance, you'll typically need to demonstrate previous experience successfully running a business in the same industry. If this is your first service station, it's much harder to get loan approval and the bank will likely review your funding arrangement yearly.
  • Location. The location of a service station and the traffic that passes by it are crucial to your business's financial success. For example, it's notably easier to get financing to buy service stations on busy roads and highways than on quiet backstreets.
  • Environmental site assessment. Petrol stations can pose serious environmental risks, human risks and high potential liabilities. Ensure that you carry out a thorough environmental site assessment of your chosen location prior to making your purchase.
  • The competition. While location is critical, service stations in prime locations will usually also have plenty of direct competition nearby. This can have a huge impact on profitability and is another factor banks may consider when assessing your application.
  • Financial position. You'll also need to take a close look at the financial position of the petrol station to determine whether it represents a viable purchase and whether it will be profitable in the future.

How can I make sure a petrol station is worth buying?

If you want to buy a petrol station, you'll first need to determine its financial state and future potential to decide whether it's worth the investment. Take a look at:

  • Business financials. Look at financial statements for the past five years as well as sales reports, forecasts and future business plans.
  • Reason for selling. It's important to understand why the current owner has put their leasehold or freehold petrol station up for sale. Are they simply looking for a new challenge, or are they moving on because the business isn't turning a profit or faces a future threat to its survival?
  • The business itself. Is it in a good location? Is it part of a franchise that restricts how it operates? Does it have all the necessary permits and licences? What arrangements does the current business owner have with suppliers and will they remain in place?
  • Competition levels. Examine the strength of the competition from nearby petrol stations and the risk this will pose to your ability to turn a profit.
  • The industry. Look at the petrol station industry as a whole to consider any risks to the business's future success. For example, what effect will the rise of electric cars have on fuel sales? Will apps and other technology that allow customers to pay for petrol at the pump without entering the shop cut in to your bottom line?
  • Staff. What skills and experience do current staff possess? How much are they paid? Do they require any licences or additional training?
    • Rebecca Pike's headshot
    Our expert says

    "With so many variables and different costs involved, it's best to enlist the help of experts.

    An accountant, business adviser or business broker can help you analyse both your own finances and the value of any business you're considering buying. They can also examine market trends to help you work out a fair value for the petrol station."

    Rebecca Pike's headshot
    Editor, Money

    How profitable is owning a petrol station?

    Like the price, the profitability of owning a petrol station will vary depending on factors such as location, size, overhead costs, fuel supplier and fuel costs. Whether you buy a leasehold or a freehold will also have an impact, not to mention how well you run the business.

    While exact profit is difficult to accurately estimate based on these factors, the annual revenue and cash flow of Australian petrol stations that are currently for sale can be accessed upon request from sellers.

    There is also the wholesale and retail costs and margin of petrol to consider. Wholesale and retail costs and margin represent a small part of the retail fuel price.

    You'll need to consider the costs of importing the fuel, excise and goods and services tax, and other costs and margins.

    According to data from the ACCC, in December 2024 fuel was sold at an average profit of 17.2 cents per litre.

    How can I finance the purchase of a petrol station?

    If you need financing to help you purchase a petrol station, you'll need to apply for a business loan.

    For the property itself, you will specifically need a commercial property loan. For other assets that you may need within the business, you'd likely need equipment finance.

    Petrol station loans are available from a wide variety of banks and other lenders around Australia, so it's worth shopping around to find a lender and loan that meet your needs.

    To qualify for a loan, you will need to provide a business plan and profit forecasts for the petrol station as well as details of its current financial position. The lender will also consider your own financial position as well as any previous industry experience before approving your loan.

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    Written by

    Editor, Money

    Rebecca Pike is Finder’s money editor, with over 7 years of experience in mortgages and personal finance. A frequent TV and radio commentator, she frequently appears on Sunrise and 7News, Today and 9News, as well as Sky News, Channel 10 and across radio and print. Rebecca previously served as Editor of Mortgage Professional Australia. She has a Master’s degree in Journalism as well as ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, which comply with ASIC guidelines. See full bio

    Rebecca's expertise
    Rebecca has written 267 Finder guides across topics including:
    • Home loans
    • Personal Loans
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