Published on 26/11/2025 by Any Business.Com.Au

Interested in Purchasing a Petrol Station? Here's What to Consider

Buying a petrol station can be a profitable and stable business move especially in Australia, where road travel, logistics, retail convenience and fuel demand continue to remain strong.

But like any major investment, a service station purchase comes with risks, responsibilities and plenty of fine print.

It's not just about selling fuel; today's petrol stations are multi-stream businesses that rely on fuel margins, convenience retail revenue, car washes, fast food, and customer loyalty.

Whether you're looking at a small independent servo or a branded, high-traffic site, understanding what to look for before signing on the dotted line is essential.

Understand How Petrol Stations Make Money

Many first-time buyers assume that fuel is where the profit is. Surprisingly, fuel margins are usually slim with high sales volume not automatically equalling high profit. The real revenue picture is broader.

Most petrol stations earn from:

• Retail fuel sales (high turnover, low margin)
• Shop sales (food, drinks, essentials, tobacco, accessories)
• Automotive extras (oils, windscreen cleaner, LPG refills, ice)
• Car wash or vacuum systems
• Food or franchise partnerships (e.g., quick service restaurants)
• Subleasing sections of the property
• ATM revenue, gas bottle swaps, and additional services

When evaluating a potential purchase, pay close attention to shop sales, cross-selling opportunities, and foot traffic not just fuel litres sold. In many stations, the convenience store is the real engine of profitability.

Location and Traffic Flow Matter More Than Almost Anything

A petrol station's potential is heavily influenced by where it sits and how vehicles can enter or exit.

Look closely at:

• Visibility from the road
• Access from both directions
• Proximity to intersections, exits or busy highways
• Competition nearby
• Presence of major retail anchors (supermarkets, fast food chains, etc.)
• Local industry, transport hubs, tradie routes, rural transport highways
• Seasonal fluctuations (tourism spikes, school holidays, etc.)

Even a beautifully fitted station will struggle if vehicles can't easily access it or if it's hidden behind competing forecourts.

If you are assessing a regional location, research whether economic drivers are stable mining towns, transport corridors, coastal tourist towns and agricultural routes all behave differently in terms of seasonal and long-term traffic.

Brand vs Independent

Many petrol stations operate under big fuel brands, while others run independently. Each has pros and cons.

Brand-affiliated stations benefit from:

• Strong customer recognition
• Corporate marketing
• Structured supply agreements
• Standardised fit-outs

However, they may also mean:

• Strict operational standards
• Tighter supply contracts
• Limited freedom in pricing or store layout

Independent stations usually offer:

• More control over pricing
• Freedom in merchandising and store branding
• Potentially higher margins if managed well

The trade-off is the lack of national branding and corporate support.

Before buying, review any supply agreements carefully, they often govern pricing, delivery schedules, required fit-outs and minimum purchase volumes.

Environmental Compliance and Fuel Infrastructure

This is one of the biggest due-diligence issues in the petrol station sector. Underground fuel tanks, lines and forecourt systems must meet strict environmental standards.

Before purchasing, ensure you understand:

• Tank age and condition
• Leak detection systems
• Maintenance records
• Recent environmental audits
• Local EPA compliance requirements
• Insurance coverage for contamination

A leaking tank can be extremely costly, and environmental issues may become the buyer's responsibility if not caught early. Many experienced buyers won't proceed unless a professional environmental assessment is completed.

As a rule, always get an independent compliance inspection.

Evaluate the Lease, Land and Ownership Structure

Some petrol stations are freehold (you own the land and business), while others are leasehold (you only buy the business and pay rent). Both can be viable, but the implications are very different.

If the station is leasehold, you need to check:

• Remaining lease term (banks often want long leases for lending)
• Rent increases
• Outgoings
• Conditions of renewal
• Restrictions on subleasing or adding services

Short leases with uncertain renewal terms can be a serious red flag, they make financing harder and limit the station's resale value.

For freehold sites, value is typically higher, but so is responsibility, especially environmental obligations.

Know Your Local Competition

Competition in the area can dramatically affect margins and performance. If a new station opens nearby, especially a large corporate chain, pricing pressure can increase immediately.

When evaluating a purchase, ask:

• Who are the nearby competitors?
• How many pumps and services do they offer?
• Are they newer, larger or more modern?
• Do they operate 24/7?
• Are there strong loyalty programs drawing customers away?

Even if the business looks profitable today, upcoming development approvals in the area could change the picture fast, so check growth plans with local council if possible.

Financial Performance: What to Look At

As with any business purchase, you'll want detailed and verified financials, typically over the past 2–3 years.

Key figures include:

• Fuel volume sold monthly
• Price and margin per litre
• Shop sales and GP margins
• Wages and roster dependency
• Operating expenses (electricity is often high due to refrigeration and pumps)
• Franchise fees (if applicable)
• Growth or decline trends
• Impact of school holidays, seasons or major events

A petrol station operating at low fuel margins but high shop profits is often more resilient than one relying purely on fuel turnover.

Cashflow is especially important, fuel supply terms and ongoing operational costs can tie up capital quickly.

Staffing, Training and Operating Requirements

You'll need processes for:

• Stock ordering
• Fuel level monitoring and deliveries
• Staff training
• Theft prevention
• Safety and compliance
• Customer service
• Store merchandising
• Food handling (if applicable)
• Extended trading hours—many stations open early or run 24/7

Buyers should understand who will run the store day-to-day. If you're not planning to be hands-on, a trusted manager is essential, and their cost must be factored into profitability.

Additional Revenue Opportunities

One of the best ways to increase the value of a petrol station is to build additional revenue streams, not just pump fuel faster.

Potential value-add opportunities include:

• Car washes
• Trailer hire
• ATM commissions
• Lotto
• Parcel collection lockers
• Mobile phone recharge
• Seating and coffee service
• Hot food or branded QSR partnerships
• Automotive accessories
• Local produce or convenience lines
• EV charging (a strategic longer-term play in some locations)

When reviewing a site, ask yourself "What would improve total spend per customer?" as that is where profit growth usually lies.

Due Diligence is Non-Negotiable

Buying a petrol station is a major investment, and due-diligence should always include:

• A business accountant experienced in service stations
• A solicitor familiar with fuel industry contracts and commercial leases
• An environmental specialist
• Independent valuation
• Careful review of supplier agreements

Never rely solely on information provided by the seller—obtain original source documentation wherever possible.

What Next?

Petrol stations can deliver strong returns, long-term stability and multiple revenue streams, but they're also more complex than many other retail businesses. From environmental compliance to fluctuating fuel margins and high operational demands, it pays to go in with eyes wide open.

If you do your homework, understand how the site makes money, and position it to grow through strategic add-on services, a petrol station can become a high-performing asset and a rewarding business for years to come.

Ready to find one that works? Search Petrol Stations for Sale here.

AnyBusiness.com.au

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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