Buying fuel is one of the biggest expenses for vehicle owners, especially for transporters and commercial drivers. Rising fuel costs generally make it difficult to manage daily operations. Fuel finance is a credit facility that helps vehicle owners purchase fuel on credit and pay later. This financial support usually comes with flexible repayment options and competitive interest rates.
Businesses in the transportation sector leverage it to ensure uninterrupted operations without upfront cash transactions. This blog post explains how oil and gas funding works, who can apply for it, its benefits, and what documents are required for approval.
What is Fuel Finance?
Oil and gas funding enables access to instant credit to purchase petrol, diesel or other fuels for fleet owners.
Typically, once you avail of this facility, you get a pre-approved credit limit based on your eligibility and repayment capacity. You can then use this credit at designated petrol pumps of leading fuel companies like Indian Oil, Bharat Petroleum and Hindustan Petroleum across India.
Later on, you need to repay these dues using Equated Monthly Instalments (EMIs). The tenure may vary depending on individual requirements and the loan provider's policy.
Key Benefits of Fuel Finance
Some major benefits offered by oil and gas funding offered by financial institutions like Shriram Finance are:
- Low-Cost Funds: Interest rates typically start at 12% per annum, making managing working capital needs affordable for vehicle owners.
- Wide Fuel Acceptance: You can use credit at petrol pumps of leading providers like IOC, HPCL, and BPCL across India.
- Flexible Repayment: Choose to repay monthly, quarterly or half yearly as per cash flows. Allows part prepayment without penalties.
- Easy Availability: Quick approval based on limited Know Your Customer (KYC) documents. Credit limit assigned within a few days.
- Improves Credit Profile: Timely repayments positively affect credit scores. This enables higher credit access over time.
Thus, oil and gas funding offers easy capital to manage day-to-day working capital needs. It provides relief from upfront fuel expenses, helping maintain smooth operations.
Eligibility Criteria
The typical eligibility criteria for oil and gas funding are as follows:
- Age: Usually between 18 and 60 years old
- Nature of Work: Self-employed, salaried or registered businesses
- Years in Business: Minimum 3 years experience in the transport industry
- Income Status: May be required to provide income proof documents, which vary from one loan provider to another
- KYC Documents: May be required to submit Permanent Account Number (PAN) card and an Aadhar card
Note: Eligibility criteria may vary based on the financial institution's policies and are subject to change. Applicants are advised to check with the respective financial institution for the most updated requirements.
Application Process
The application process for oil and gas funding is quick and convenient:
Step 1: Start by providing your basic contact details to generate a unique application number. This ensures a smooth tracking process for your loan request.
Step 2: To confirm your identity, financial institutions may send a one-time password (OTP) to your registered mobile number. Enter the OTP to proceed securely with the application but this step varies.
Step 3: Fill in all necessary details, including personal information, employment status, and income details. This step helps assess eligibility and loan terms.
Step 4: Upload or share the required documents for verification. An executive may contact you to confirm the submitted information before proceeding with the approval process.
Once basic KYC and income proofs are submitted, the financial institution analyses creditworthiness. Based on this, approval decisions and applicable credit limits are disclosed. Depending on the financial institution, the whole process, from registration to disbursal, may take a few working days.
Conclusion
Rising fuel costs severely impact the viability of vehicle owners and transport companies. Financing oil and gas projects provide easy credit to purchase fuel and ease this expense burden. They typically offer interest rates starting from 12% interest per annum with EMI repayment flexibility.
By submitting basic KYC documents and proof of income, transporters can get fuel credit. This helps ease working capital constraints, ensuring smooth business operations. Thus, fuel finance makes for an attractive offering for vehicle operators to drive profitability.
