Soil is an important medium for identifying novel bacterial strains because it plays significant roles in ecosystem such as plant development, nitrogen cycling, and pollution remediation, particularly under harsh conditions. This research focuses on taking action to address the pressing global issues of rising energy use, environmental degradation, and climate change. It is imperative that renewable energy sources are explored, especially biofuels—those that include the use of oleaginous microorganisms—as a crucial component of this change. The present study is aimed to investigate the potential of isolating oleaginous bacterial strains from soil samples from Lucknow, India, for biofuel production. Using Nile-red method and primary lipid extraction, strain DAA3 was observed to produce the highest lipid content. Carbon, nitrogen, and salt concentration were optimized using response surface methodology, and the highest lipid production (55%) was at a C:N ratio of 12.5:1 and a salt concentration of 17.07 g/L. The strain was identified as Bacillus pumilus and fatty acid analysis was performed using GC-MS. Predominant fatty acid observed was 14-methyltetradecanoic acid (51%) along with palmitic acid (16%). The fuel qualities meet American and English biofuel standards, including cetane number (66.04), density (0.86 g/cm3), greater heating value (38.91 MJ/kg), and kinematic viscosity (3.47 mm2/s). The study highlights the importance of screening and characterizing oleaginous bacteria from soil and utilizing Bacillus pumilus DAA3 for biofuel production, which can contribute to the development of alternate energy sources.