The government has barred industrial, commercial and institutional consumers from purchasing petrol and diesel through retail fuel stations and capped diesel sales at 200 litres per customer or vehicle per day, citing geopolitical tensions and concerns over disruptions to global petroleum supply chains.
The restrictions, which will remain in force for an initial period of up to 90 days, come amid a surge in diesel demand in certain regions after bulk consumers shifted purchases to retail fuel stations to take advantage of lower prices.
The ministry of petroleum and natural gas, through the Motor Spirit and High Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026, directed fuel retailers and oil marketing companies to curb bulk purchases from retail outlets and ensure supplies intended for ordinary consumers are not diverted.
The government said the move was necessitated by the "current prevailing geopolitical situation affecting certain regions of the world" that has adversely impacted international petroleum supply chains, shipping logistics and the availability of petroleum products.
"It has been observed in current situation that abnormal increases in sales of Motor Spirit (petrol) and High Speed Diesel (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," the notification said.
According to the order, institutional, industrial and commercial consumers may be barred from procuring petrol and diesel from retail fuel stations and would instead be required to source supplies through their own consumer pumps or designated bulk supply points.
The notification also restricts diesel sales at retail outlets to vehicle fuel tanks or Petroleum and Explosives Safety Organisation (PESO)-approved containers, with purchases capped at 200 litres per customer or vehicle per day. Such diesel "cannot be resold", the order said.
The government said bulk procurement through retail stations could divert supplies intended for ordinary consumers and "create the potential for localised shortages and disruption of essential services to the common man".
The restrictions follow a widening gap between retail and bulk fuel prices.
In Delhi, diesel sold through retail pumps costs Rs 95.20 per litre, while bulk supplies are priced at Rs 134.50 per litre. State-owned oil companies maintained lower retail prices to shield consumers from higher costs following the West Asia crisis earlier this year, while industrial users continued to pay market-linked rates.
The price differential has encouraged bulk consumers, including industries and telecom tower operators, to source fuel from retail outlets. It has also shifted sales volumes toward public sector fuel stations from private retailers offering fuel at higher prices.
In May, state-run fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) recorded a 4.8 per cent increase in petrol sales and a 6.4 per cent rise in diesel sales.
The government said the measures were necessary to ensure the "equitable availability" of petrol and diesel, prevent hoarding and diversion, and maintain uninterrupted fuel supplies across the country.
Referring to tensions arising from the U.S.-Israel conflict with Iran, the order noted that geopolitical developments have strained global petroleum supply chains, shipping logistics and the availability of petroleum products, making prudent management and conservation of supplies necessary.
The order empowers public-sector oil marketing companies and other authorised fuel retailers to enforce the restrictions and directs state governments and Union Territory administrations to take "all necessary measures to implement" the order, including "action against hoarding, black marketing, unauthorised procurement, diversion and other malpractices."
"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," the notification said.
Any violation of the order will be punishable under the provisions of the Essential Commodities Act. The restrictions may be extended beyond the initial 90-day period through a fresh government order.