Govt bars bulk purchases of petrol, diesel at pumps; here’s why

The government has restricted industrial, commercial and institutional users from buying petrol and diesel at petrol pumps. Instead, they have been asked to source their fuel requirements from bulk sale points, according to an official order.

What does the order say? 

The order caps diesel sales at retail outlets to 200 litres per customer or vehicle per day. These restrictions were introduced through the Ministry of Petroleum and Natural Gas's Motor Spirit and High Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026, issued on June 11.

The measures would remain in force for up to 90 days at a time, unless revoked earlier, and could be extended by a fresh government order. The government said the move aims to ensure equitable availability of petrol and diesel, prevent hoarding and diversion, and maintain uninterrupted supplies across the country.

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Why was the order passed? 

The notification cited the current geopolitical situation affecting certain regions of the world as having adversely impacted international petroleum supply chains, shipping logistics and availability of petroleum products. It noted that abnormal increases in petrol and diesel sales at retail outlets in some parts of the country were driven by industrial, commercial and institutional consumers shifting to retail outlets due to the price difference between retail and bulk sales.

Losses to oil companies

The price differential arose after state-owned oil companies modulated retail prices to shield common users from the spike in costs following the West Asia crisis in late February. For example, in Delhi, diesel costs ₹95.20 a litre at petrol pumps, while bulk sales are priced at ₹134.50 a litre. Bulk users such as telecom towers, industries using diesel for power generation and trucking companies are charged market rates, while retail pump prices remain lower than cost.

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State fuel retailers are reportedly losing about ₹36.5 a litre on diesel sold to retail customers and ₹9 a litre on petrol sales, while supplies to industrial buyers are sold at market prices. India is a net exporter of refined fuels, but higher fuel sales at subsidised retail rates within the country have affected the profitability of Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.

The price gap has also changed sales patterns, with volumes shifting to public sector petrol pumps from private sector outlets that priced petrol and diesel at higher rates. In May, IOC, BPCL and HPCL recorded a 4.8 per cent rise in petrol sales and a 6.4 per cent increase in diesel sales. These three state-run fuel retailers control about 90 per cent of India's more than 100,000 fuel stations.