The Indian government has barred industrial, commercial, and institutional consumers from purchasing diesel at retail fuel stations to safeguard supplies meant for ordinary consumers. This decision comes in response to an abnormal surge in diesel sales at petrol pumps, driven by diversion from bulk channels.
Government Notification Details
In a notification issued on June 11, the Petroleum Ministry highlighted that industrial, commercial, and institutional consumers have increasingly shifted to retail outlets due to price differences between retail and bulk sales. This shift has created pressure on supplies intended for retail customers.
The ministry observed that "abnormal increases in sales of Motor Spirit and High Speed Diesel through Retail Outlets in certain parts of the country are driven by shifting of industrial, commercial and institutional consumers to Retail Outlets owing to the price difference between retail and bulk sale prices."
Impact on Consumer Supplies
According to the notification, this trend is resulting in the "diversion of supplies intended for retail consumers" and creating the possibility of "localised shortages and disruption of essential services to common man." To address this, the Centre issued the Motor Spirit and High Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026, under the Essential Commodities Act.
Key Provisions of the Order
Under the order, the government can direct public sector oil marketing companies and other authorized fuel retailers to prevent institutional, industrial, and commercial customers from sourcing petrol and diesel from retail outlets. Such consumers must now meet their fuel requirements through their own consumer pumps.
Retail outlet dealers have been instructed to dispense high-speed diesel only into vehicle tanks or Petroleum and Explosives Safety Organisation (PESO)-approved containers. Sales are limited to 200 liters per customer or vehicle per day. The notification states: "Retail Outlet dealers shall dispense HSD only in a vehicle tank, or PESO-approved containers, and not exceeding 200 litres in a day to a customer/vehicle and this HSD cannot be resold."
Reasons for the Measure
The ministry explained that "such bulk procurement through Retail Outlets has the potential to adversely affect the availability of Motor Spirit and High-Speed Diesel for bona fide retail consumers and may lead to hoarding, diversion and other malpractices." The notification also linked the move to global developments, stating that the prevailing geopolitical situation affecting some regions has impacted international petroleum supply chains, shipping logistics, and the availability of petroleum products.
Duration and Penalties
Any restrictions imposed under the order will initially remain valid for a period not exceeding 90 days, unless revoked earlier or extended through a subsequent order. Violations of the order will attract penalties under the Essential Commodities Act and other applicable laws.
