India bars bulk users from buying petrol, diesel at retail pumps for 90 days – Firstpost

India has barred industrial, commercial and institutional consumers from purchasing petrol and diesel from retail fuel stations for up to 90 days, as it seeks to curb abnormal fuel demand driven by a widening gap between retail and bulk fuel prices amid disruptions in global energy markets.

The Ministry of Petroleum and Natural Gas has issued an order directing large fuel consumers to procure their requirements through designated bulk-sale channels or their own consumer pumps instead of retail outlets.

The move follows a sharp rise in diesel sales at retail pumps in certain parts of the country, with state-owned oil marketing companies (OMCs) attributing the increase to bulk consumers shifting purchases to retail outlets to take advantage of significantly lower prices.

In Delhi, diesel is currently priced at Rs 95.20 per litre at retail pumps, compared with Rs 134.50 per litre for bulk buyers — a difference of nearly Rs 40 per litre.

The price gap emerged after OMCs moderated retail fuel prices to shield ordinary consumers from a surge in international crude oil and fuel costs following heightened geopolitical tensions in West Asia earlier this year. While retail prices remained relatively stable, bulk consumers continued to pay market-linked rates.

“The current prevailing geopolitical situation affecting certain regions of the world has impacted international petroleum supply chains, shipping logistics and availability of petroleum products,” the ministry said in its notification.

“It has been 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,” it added.

Retail diesel purchases capped

Under the temporary restrictions, retail fuel stations will no longer be allowed to supply petrol and diesel to industrial, commercial and institutional consumers. Such entities will be required to source fuel through authorised bulk-sale arrangements.

The order also places restrictions on diesel purchases at retail outlets. Diesel can now be supplied only into vehicle fuel tanks or containers approved by the Petroleum and Explosives Safety Organisation (PESO).

Retail diesel purchases have been capped at 200 litres per customer or vehicle per day, and the notification explicitly states that fuel bought from retail outlets cannot be resold.

The government said the measures are intended to prevent diversion of supplies meant for ordinary consumers and avoid localised shortages that could disrupt transportation, agriculture and other essential services.

“The Government is satisfied that it is necessary and expedient in the public interest to regulate the supply of Motor Spirit and High Speed Diesel through Retail Outlets for equitable availability and distribution,” the order said.

Oil companies empowered to enforce restrictions

The notification authorises public-sector OMCs and other licensed fuel retailers to implement the restrictions with immediate effect.

State governments and Union Territory administrations have also been directed to monitor compliance and take action against hoarding, black marketing, unauthorised procurement, fuel diversion and other malpractices.

Any violation of the order will attract penalties under the Essential Commodities Act.

The government has, however, retained the power to exempt specific consumers, sectors, regions or categories of transactions through special orders if circumstances warrant.

Impact on industry

The restrictions are expected to affect a broad range of bulk diesel consumers, including transport fleet operators, telecom tower companies, construction firms, manufacturing units and establishments that rely on diesel generators for captive power generation.

Industry executives said the move could raise operating costs for businesses that had increasingly shifted purchases to retail pumps as bulk diesel prices climbed in recent months.

For OMCs, retail and bulk fuel sales have traditionally operated as separate channels, with bulk prices more closely aligned to prevailing international fuel costs. The widening gap between the two segments, however, altered purchasing patterns and led to a surge in retail demand in some regions.

The latest order formalises supply controls that the government had signalled in recent weeks. The Petroleum Ministry had earlier urged consumers to avoid panic buying and maintained that there was no shortage of petrol, diesel or LPG in the country.

Officials said the temporary restrictions are aimed at ensuring equitable fuel distribution, preventing hoarding and maintaining uninterrupted supplies across the country at a time when global energy markets remain under pressure.

The order will remain in force for an initial period of 90 days and may be extended if market conditions warrant further intervention.

With inputs from agencies.