Step 1: gross margin from fuel
The margin per litre is the difference between your selling rate and your purchase rate. Check the exact figure on your supplier's invoice and rate notification, because it can differ by fuel and over time.
Gross margin = litres sold x margin per litre
Example: 300,000 litres in a month at Rs 5 per litre is Rs 1,500,000.
Step 2: subtract fuel losses
Losses are litres you paid for and never sold: a tank that dips below book stock, or a tanker that delivered less than the invoice. Value them at your purchase rate.
- Stock loss: negative dip variance added up over the month
- Delivery shortage: invoiced litres minus received litres. See purchase and shortage tracking
- Unrecovered credit: Qarza you do not expect to recover
Step 3: subtract running costs (Kharcha)
Salaries, electricity, rent, repairs, bank charges and other expenses. Keep owner drawings out of this list. Drawings are money you take out of profit, not a cost of earning it.
A worked monthly example
| Line | Rs |
|---|---|
| Gross margin (300,000 L x Rs 5) | 1,500,000 |
| Stock loss (600 L at Rs 270) | -162,000 |
| Delivery shortages (150 L at Rs 270) | -40,500 |
| Bad credit written off | -50,000 |
| Salaries | -420,000 |
| Electricity, rent and repairs | -180,000 |
| Bank and other charges | -30,000 |
| Net profit | 617,500 |
In this example the losses and bad credit cost Rs 252,500, or about 17% of the gross margin. Recovering even part of that matters more than finding another Rs 0.10 per litre.
Other income
If you earn from lubricants, a shop or a tyre service, track them as separate lines so the fuel margin stays visible.
Check the loss side with your own numbers
The fuel loss calculator turns litres of loss into rupees and shows how many litres of sales you must make to earn the loss back.
Doing this every month without a spreadsheet
The profit and loss and the monthly performance and profit trend reports in PumpOS use the same logic: sales from meters, purchases, shortages and Kharcha. See accounts and reports.
How much does your pump lose each month?
Estimate it in a minute, then see how daily books make it visible.
Frequently asked questions
How much profit does a petrol pump make per litre?
It depends on your agreement and the fuel. Check the margin on your supplier's invoice and rate notification rather than relying on a general figure. The examples in this guide use Rs 5 per litre only to show the method.
Should I include owner drawings in expenses?
No. Drawings are money taken out of profit. Counting them as expenses makes the pump look less profitable than it is.
Why does my profit not match my bank balance?
Stock, credit owed to you, unpaid purchases and drawings all change cash without changing profit. A balance sheet and cash book help reconcile them.