Caps retail outlet supply at 200 litres per day per customer
New Delhi: 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” to curb black marketing and hoarding of diesel by unscrupulous elements, imposing a temporary measure initially valid for up to 90 days and capping diesel dispensation at retail outlets at 200 litres per day per customer or vehicle.
The order comes amid a significant surge in diesel sales through PSU OMC retail outlets in May 2026, with 327 districts recording more than 10 percent growth and 80 districts seeing growth exceeding 30 percent. This is driven by industrial and commercial consumers shifting their procurement from dedicated consumer pumps to retail outlets due to the price difference between bulk and retail diesel—with retail diesel currently around ₹40 per litre cheaper than bulk diesel—as PSU OMCs are absorbing losses of approximately ₹500 crore per day to protect retail consumers during the ongoing West Asia disruption.
Under the new regulations, retail outlets will dispense diesel only into vehicle tanks or PESO-approved containers, with a maximum limit of 200 litres per day per customer or vehicle. Diesel purchased at retail outlets cannot be resold. Industrial, institutional, and commercial customers are prohibited from procuring fuel from retail outlets and must source their requirements through consumer pumps.
Oil Marketing Companies and retail outlet dealers will be responsible for ensuring compliance, while state governments and UT administrations have been directed to take necessary actions against malpractices such as black marketing or unauthorized diversion. Violations will be subject to penalties and legal action under the Essential Commodities Act, 1955.
The government clarified that these measures are specifically designed to protect retail consumers and will not affect ordinary citizens, as the 200-litre cap is far beyond what any private vehicle would need. The measures are aimed at large and bulk consumers who should not be procuring diesel from retail outlets to take undue advantage of price arbitrage. Prohibiting diversion of fuel from retail outlets to bulk consumers essentially means more supply stays in the system for retail customers.
The order is explicitly defined as a temporary measure designed to address specific current market challenges and is not a rationing measure. There is no shortage of petrol or diesel in the country, with India remaining the world’s 4th largest refiner and 5th largest exporter of refined petroleum products. Blatant instances of procurement of large quantities of diesel in jerry cans and its resale have come to the government’s notice, and this order will enable strict action against such buyers, operators, dealers, and officers involved in black marketing and hoarding. The government remains committed to ensuring uninterrupted fuel supplies, protecting consumer interest, and maintaining energy security through timely and proactive measures.