Government Caps Retail Diesel to Prevent Hoarding and Protect Consumers

Under the new order, diesel purchased at retail outlets is limited to 200 litres per customer per day and can only be dispensed into vehicle tanks or PESO-approved containers.

The Ministry of Petroleum and Natural Gas has introduced the "Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026" to prevent black marketing and hoarding of diesel. These regulations are temporary and will remain in force for up to 90 days, ensuring that retail consumers continue to have access to diesel without inconvenience. The measures were prompted by extraordinary demand at certain retail outlets caused by industrial, institutional, and commercial consumers shifting procurement from dedicated consumer pumps to retail outlets to take advantage of lower retail diesel prices.

Data for May 2026 shows that sales through Public Sector Undertaking (PSU) Oil Marketing Company retail outlets surged sharply, with 327 districts recording more than 10 percent growth and 80 districts seeing growth above 30 percent, highlighting the need for regulatory intervention to ensure fair distribution.

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Limiting Bulk Purchases Protects Ordinary Consumers

Under the new order, diesel purchased at retail outlets is limited to 200 litres per customer per day and can only be dispensed into vehicle tanks or PESO-approved containers. This cap is far above the needs of the average car or two-wheeler owner, so ordinary consumers will not face any restrictions. The order specifically targets bulk buyers who procure diesel from retail outlets to resell or exploit the price difference, which has caused localized supply issues. Industrial and institutional customers are required to continue sourcing diesel through consumer pumps, while Oil Marketing Companies and retail dealers are tasked with enforcing the new restrictions and preventing attempts to circumvent them.

Violations of the order may result in penalties under the Essential Commodities Act, 1955, or other applicable laws, ensuring accountability and discouraging malpractices such as hoarding and black marketing. State governments and Union Territory administrations have also been directed to assist in monitoring and enforcement to protect consumer interests.

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Protecting Consumers While Absorbing Price Differences

The government clarified that these measures are not a rationing scheme, and there is no shortage of diesel or petrol in the country. India continues to be the world's fourth-largest refiner and fifth-largest exporter of petroleum products. Public Sector Oil Marketing Companies are currently absorbing losses of around ₹500 crore per day on petrol, diesel, and LPG to maintain affordability for households, farmers, and other retail consumers, while industrial and bulk pricing tracks international markets.

The order ensures that diesel remains available to regular consumers and essential services during periods of supply disruption, such as those caused by ongoing disruptions in West Asia. By prohibiting diversion of diesel from retail outlets to bulk buyers, more fuel remains in the system for end-users, safeguarding both energy security and public interest.