The Government of India has imposed fresh restrictions on bulk fuel purchases and diesel sales at retail petrol pumps under the Essential Commodities Act, in a move aimed at addressing supply concerns and stabilising operations of state-run oil marketing companies. According to the directive issued on June 11, petrol pumps across the country are no longer permitted to sell petrol or diesel to bulk industrial or commercial users. These entities have been instructed to procure fuel directly through their own authorised consumer infrastructure rather than relying on retail outlets.

The order defines bulk users to include a wide range of organisations such as state transport undertakings, industrial units, IT parks, malls, defence establishments, and other commercial complexes. Officials said the decision is intended to prioritise availability of fuel for individual consumers and prevent diversion of subsidised or retail-priced fuel into bulk commercial channels. The government has also placed a daily cap on diesel sales, restricting dispensing to a maximum of 200 litres per vehicle per day.

Retail outlets have been instructed to supply high-speed diesel only into vehicle tanks or PESO-approved containers, and strictly prohibit resale of the fuel under any circumstances. Officials from state-run oil marketing companies indicated that the restrictions are aimed at reducing revenue losses arising from price differentials between retail and bulk fuel sales. Diesel, for example, is significantly cheaper at retail pump rates compared to bulk procurement prices, creating incentives for diversion and arbitrage.

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Industry estimates suggest that oil companies have been incurring losses per litre on both petrol and diesel amid fluctuating global crude prices. The move comes against the backdrop of volatile international oil markets, with Brent crude recently falling below $86 per barrel following reports of possible geopolitical easing in West Asia. The decline represents a sharp correction from earlier peaks recorded in March, when prices surged close to $120 per barrel amid supply disruption fears.

Officials said the restrictions, which have been implemented for an initial period of three months, are part of a broader strategy to ensure uninterrupted fuel availability for households and essential services.  The government has already undertaken several measures in recent months, including prioritising liquefied petroleum gas (LPG) supply for domestic consumers and adjusting tax structures to support blending of ethanol in petrol. The latest directive reflects ongoing efforts to balance consumer supply, pricing stability, and financial viability of state-run fuel distributors in a highly volatile global energy environment.

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