In a move aimed at protecting retail consumers and ensuring uninterrupted fuel availability, the Ministry of Petroleum and Natural Gas has notified the Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026, introducing temporary restrictions on diesel purchases at retail fuel stations across the country.
The order, which will remain in force for an initial period of up to 90 days, seeks to curb black marketing, hoarding and the diversion of subsidized retail diesel by industrial and bulk consumers.
According to the ministry, the current situation has arisen due to an extraordinary and uneven surge in diesel demand at Public Sector Oil Marketing Company (PSU OMC) retail outlets. A significant number of industrial, institutional and commercial consumers have shifted their diesel procurement from dedicated consumer pumps to retail outlets because retail diesel prices are substantially lower than bulk diesel prices.
Officials noted that private oil marketing companies recorded a decline of nearly 58% in High-Speed Diesel (HSD) sales during May 2026, largely due to higher prices charged by them. Meanwhile, PSU retail outlets witnessed a sharp increase in demand, with 327 districts reporting diesel sales growth of more than 10% compared to the same period last year. Among these, 80 districts recorded growth exceeding 30%.
To address the situation, the government has directed PSU OMCs including Indian Oil, Bharat Petroleum and Hindustan Petroleum, to implement strict controls on diesel sales through retail outlets.
Under the new regulations, diesel will be dispensed only into vehicle fuel tanks or Petroleum and Explosives Safety Organisation (PESO)-approved containers, with a maximum purchase limit of 200 litres per day per customer or vehicle. The government has clarified that diesel purchased from retail outlets cannot be resold.
The order also prohibits industrial, institutional, and commercial consumers from procuring diesel from retail outlets. Such consumers must source their fuel requirements through designated consumer pumps. Oil marketing companies and retail outlet dealers have been made responsible for ensuring compliance and preventing any attempts to circumvent the rules.
State governments and Union Territory administrations have been instructed to take strict action against black marketing, unauthorized diversion and other malpractices. Violators may face penalties and legal action under the Essential Commodities Act, 1955 and other applicable laws.
The ministry emphasized that the measures are intended solely to protect retail consumers and essential services from localized supply disruptions. It clarified that the 200-litre daily limit is significantly higher than the fuel requirements of ordinary motorists and will not affect individual consumers.
The government also highlighted that PSU OMCs are currently absorbing losses of approximately ₹500 crore per day on the sale of petrol, diesel and domestic LPG to shield consumers from rising global energy prices amid ongoing disruptions in West Asia. Retail diesel currently remains around ₹40 per litre cheaper than bulk diesel, creating incentives for large consumers to exploit the price difference.
Officials stressed that the temporary order should not be interpreted as fuel rationing. There is no shortage of petrol or diesel in the country, they said, adding that India remains the world’s fourth-largest refiner and fifth-largest exporter of refined petroleum products.
The government reiterated its commitment to maintaining energy security, ensuring uninterrupted fuel supplies and protecting the interests of consumers through timely and proactive interventions.
