How to Start a Petrol Station Business in the UK [Guide]

If you’re thinking about launching a petrol station business in the UK, you should know that it’s a venture with real cash flow potential – especially in the right location with the right setup. However, unlike freelancing or some online services, petrol stations require substantial capital, strict compliance, and a smart operational strategy.

This guide explains how to start a petrol station business in the UK so you can launch your new business with clarity and confidence.

Key takeaways

• Petrol stations are no longer fuel-only businesses
  UK forecourts are no longer focused just on fuel. Convenience stores, food-to-go, car washes, and EV charging now play a central role in attracting customers and boosting profitability.
• Early structural and compliance decisions shape long-term success
  Choosing the right business structure, securing licences, planning permission, environmental permits, and specialist insurance from the outset reduces risk and makes your business more attractive to lenders, councils, and partners.
• Capital requirements are significant
  Opening a forecourt can range from £300,000 for small local sites to several million for motorway or fully equipped sites.
• The operating model and funding strategy must match your goals and location
  Whether you run a branded or independent site, how you fund it will affect margins, flexibility, and cashflow for years to come.

Why start a petrol station business now?

Petrol forecourts remain a core part of the UK’s transport and local retail infrastructure. There are thousands of active forecourt sites across the country, and many now operate as mixed-use destinations rather than fuel-only stops.

Alongside petrol and diesel, modern forecourts increasingly generate income from convenience retail, food-to-go, car wash services, and other add-ons. This diversification is important because non-fuel revenue streams typically offer higher margins and help reduce reliance on fuel price volatility once a site is operating efficiently.

Here’s what’s currently happening in the market:

• The UK has over 8,000 active petrol forecourt sites, many of which now generate a significant share of income from convenience retail and services.
• Non-fuel forecourt sales across the UK are worth several billion pounds annually, highlighting the growing importance of retail and added services to site profitability.
• Petrol station industry revenue in the UK remains substantial, with modest growth driven by diversification rather than fuel volume increases.
• The UK’s public EV charging network has expanded rapidly, with more than 80,000 public charging devices installed nationwide, increasing the relevance of charging infrastructure for forecourts.

How to start a petrol station business in the UK in 6 steps

Starting a petrol station business in the UK is a major undertaking, so getting the foundations right from the very beginning can make the difference between a profitable, resilient operation and one that struggles under cost and compliance pressure.

This 6-step breakdown will lead you through the most important phases when starting a petrol station business:

Step 1: Choose the right business structure

Your legal structure affects tax obligations, personal liability, employee management, and access to capital. It also impacts your long-term flexibility, compliance obligations, and public image.

Your main options include:

Once you’ve chosen your structure, you need to officially register with Companies House. Use ANNA’s registration service to do this online in minutes, without any paperwork hassle.

Step 2: Get your licences and insurance

Because petrol forecourts store and dispense hazardous substances, you’ll need to secure the correct licences and permissions, put environmental safeguards in place, and arrange specialist insurance cover to protect both the site and the public.

Petroleum storage and fuel supply licensing

Any business that stores petrol for sale to vehicles must hold a petroleum storage certificate issued by the local council. This licence covers how petrol is stored, transferred, and dispensed on site, including tank specifications, safety systems, and inspection schedules.

Operating without this licence isn’t permitted, and councils will inspect sites both before the approval and periodically after.

Planning permission and site approval

A petrol filling station almost always requires planning permission, whether you are building a new site, converting an existing property, or making significant changes such as adding a canopy, shop, car wash, or EV chargers.

Planning authorities assess factors such as traffic flow, access points, environmental impact, visual appearance, and noise. Conditions attached to planning consent can be detailed and strict, so engaging with the local planning authority early can prevent delays and costly redesigns later.

Environmental permits and pollution control

Forecourts must also meet environmental protection requirements due to the risk of soil, groundwater, and air pollution. You may need Local Authority permits or environmental permissions covering activities such as unloading petrol into storage tanks and operating vapour recovery systems.

These permits define how fuel must be handled, monitored, and reported, and they require you to maintain proper records.

Environmental compliance is an ongoing requirement. Regular tank testing, leak detection systems, and documented maintenance are essential parts of staying compliant and protecting the site from long-term contamination risks.

Petroleum safety regulations

All forecourt operations must comply with The Petroleum (Consolidation) Regulations 2014, which govern the safe storage, handling, and dispensing of petrol. These regulations cover areas such as tank construction, separation distances, emergency controls, signage, staff training, and incident response procedures.

Compliance is assessed by local authorities and forms the backbone of forecourt safety law in the UK.

Do you need insurance for a petrol station business?

Yes – alongside licences and permits, appropriate insurance is a practical and often mandatory requirement. Given the risks involved, standard business insurance isn’t sufficient for a petrol station. Most forecourts require:

Many councils and lenders will expect proof of appropriate insurance before final approvals or funding are granted, so it should be arranged early in the setup process.

Step 3: Decide how you will operate

When starting a petrol station, one of the first strategic decisions is whether to operate an independent forecourt or partner with a major fuel brand under a dealer or franchise agreement. Each approach has advantages and trade-offs:

Branded site

Branded sites partner with a trusted fuel brand, benefiting from recognition and established customer trust.

The main pros include:

• Brand recognition can increase footfall
• Supply security with guaranteed deliveries and consistent quality standards
• Marketing support through national campaigns and promotions

However, contracts often impose pricing restrictions and strict site appearance rules, limiting flexibility in services, product range, and pricing decisions.

Independent site

Independent sites operate under full control, allowing greater flexibility in retail offerings and pricing.

Some of the main benefits are:

• Full control over pricing, retail mix, and services
• Potentially higher margins from flexible retail product choices
• Ability to negotiate competitive fuel supply contracts directly

However, success relies heavily on local reputation, service quality, and convenience. Marketing and customer attraction are fully the owner’s responsibility, and there may be less financial or operational support for site upgrades.

Step 4: Build a retail strategy

Many successful forecourts treat the shop as a business within a business. Fuel margins can be tight, so the convenience store and additional services often deliver higher profits and encourage repeat visits.

Revenue streams you should consider are:

• Fuel sales: Maintain as the core business offering.
• Convenience retail: Sell coffee, hot food, premium snacks, drinks, and everyday essentials to boost profits.
• Car wash and valeting: Provide services that add value and encourage longer visits.
• EV charging: Offer a mix of rapid chargers for through traffic and slower chargers for dwell customers, with carefully set tariffs.
• Ancillary services: Include air/water stations, lottery tickets, parcel collection points, or other local services to enhance customer convenience.

To keep your customers satisfied, you should also consider the following:

• Focus on high-margin convenience items like coffee, hot food, and premium snacks.
• Use pricing and promotions to encourage customers to visit the shop after refuelling.
• Implement a simple loyalty scheme, such as a digital card or stamp system, to encourage repeat business.
• Keep the store well-stocked, clean, and easy to navigate – presentation influences perception and sales.

Step 5: Understand the costs

Opening a petrol station is a capital-intensive venture. Costs can vary depending on the type of site you choose, whether it’s a small neighbourhood forecourt or a motorway freehold with multiple facilities.

Here’s an estimate of the initial costs:

Even for a small local forecourt, initial investment often starts around £300,000–£500,000. Motorway or high-traffic sites with full retail and EV chargers can cost several million pounds.

Funding options

The right financing approach depends on your available resources, risk tolerance, and long-term plans for growth. Here’s an overview of the most common funding routes for UK forecourts:

Tip: Consider a combination of these approaches to balance risk, capital requirements, and operational flexibility.

Step 6: Stay tax compliant

Running a petrol forecourt comes with complex tax obligations. Staying on top of these ensures you avoid fines, penalties, or operational disruptions:

• Set up payroll correctly: If you employ staff, register for PAYE to manage Income Tax and National Insurance contributions.
• VAT registration and management: Register for VAT once your taxable turnover exceeds the annual threshold (£90,000).
• Keep accurate records: Maintain sales, invoices, fuel deliveries, expenses, and payroll records. Keep supporting documents for at least six years for HMRC inspections, and separate business and personal finances for clarity and compliance.
• Monitor deadlines: Submit Corporation Tax returns and VAT returns on time. Late submissions or payments can trigger penalties and interest.
• Plan for complex inventory and fuel accounting: Fuel margins and VAT can be intricate – track stock, deliveries, and usage accurately.

How ANNA can help you launch your petrol station business

Starting a petrol station involves juggling licenses, compliance, payroll, and financial planning. ANNA can simplify these tasks so you can focus on running your business.

With ANNA, you can:

• Register your business with Companies House quickly and correctly
• Open a business account to separate personal and business finances
• Track and manage VAT on fuel, retail goods, and services
• Set up and run payroll for your staff efficiently and compliantly
• Generate financial reports to monitor cashflow, profits, and expenses
• Capture receipts automatically and categorise transactions with ease
• Monitor expenses and income in real time for better budgeting
• Keep digital records for audits, inspections, and regulatory compliance
• Access guidance and tools to stay compliant and make informed decisions

By using ANNA from the very start, you can have real peace of mind. With automated tools and clear insights, managing your business becomes faster, easier, and far less stressful.