The Indian government has prohibited industrial, commercial, and institutional users from purchasing petrol and diesel at retail fuel outlets, directing them to switch to bulk sellers instead. On Wednesday, the Ministry of Petroleum and Natural Gas issued the Motor Spirit and High Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026, empowering oil marketing companies and fuel retailers to restrict bulk purchases from retail outlets for periods of up to 90 days.
Reason Behind the Move
The decision comes in response to abnormal demand growth, particularly for diesel, observed in certain regions after bulk consumers began shifting their purchases to petrol pumps due to significant price differences. In Delhi, diesel at retail outlets costs Rs 95.20 per litre, while the bulk sale price stands at Rs 134.50. This price gap emerged after state-owned oil companies adjusted retail fuel rates to shield ordinary consumers from rising costs linked to the Middle East crisis in late February. While bulk consumers—such as telecom towers and industries using diesel for power generation and other feedstock needs—continue to pay market-linked rates, retail pump prices remain substantially lower.
Government Justification
Citing global conditions, the government stated that the move is necessary because of the "current prevailing geopolitical situation affecting certain regions of the world," which has disrupted international petroleum supply chains, shipping logistics, and the availability of petroleum products. The notification further noted that abnormal increases in sales of petrol and diesel through retail outlets in certain parts of the country are driven by industrial, commercial, and institutional consumers shifting to retail outlets due to the price difference between retail and bulk sale prices.
Key Provisions of the Order
Under the new framework, institutional, industrial, and commercial users may be barred from buying fuel at retail outlets and will instead be required to procure supplies through their own consumer-operated pumps. Retail sales of diesel have also been tightened, with purchases restricted to vehicle fuel tanks or containers approved by the Petroleum and Explosives Safety Organisation (PESO). The order caps such purchases at 200 litres per customer or vehicle per day and specifies that diesel "cannot be resold."
Enforcement and Penalties
The government stated that bulk procurement from retail stations risks diverting supplies meant for ordinary consumers and could "create the potential for localised shortages and disruption of essential services to the common man." Public sector oil marketing companies, along with authorised fuel retailers, have been empowered to enforce the restrictions, while state governments and Union territories have been directed to act against hoarding, black marketing, unauthorised procurement, and diversion of fuel.
Duration and Exemptions
The order will remain in force for up to 90 days initially, with the provision for extension through a fresh government notification if required. The government reiterated that the measures are intended to ensure "equitable availability" of petrol and diesel, prevent diversion and hoarding, and maintain uninterrupted fuel supply across the country. The notification also stated that the government may, by a special order, exempt any consumer, class of consumers, area, transaction, or category of transactions from all or any of the provisions of this Order. Violations will be punishable under the provisions of the Essential Commodities Act.
State and Union territory administrations have been tasked with ensuring full implementation of the order, including action against hoarding, black marketing, unauthorised procurement, diversion, and other irregularities.
