Govt curbs diesel hoarding as OMCs absorb losses of Rs 500 crore per day

The Centre has imposed temporary restrictions on diesel sales through retail outlets, limiting purchases and preventing resale. The move aims to curb hoarding, black marketing and diversion of fuel supplies, while PSU oil companies continue absorbing significant losses to protect consumers

New Delhi: The government on Friday introduced temporary restrictions on diesel sales through retail outlets to curb hoarding and black marketing, as public sector oil marketing companies (OMCs) continue to absorb losses of around Rs 500 crore per day to shield consumers from global fuel price volatility.

The Ministry of Petroleum and Natural Gas said that the ‘Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026′ introduces temporary measures initially valid for up to 90 days.

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The move is aimed at ensuring uninterrupted diesel availability for retail consumers and preventing diversion of subsidised retail fuel supplies to bulk users, the ministry said.

Under the new rules, retail outlets will dispense diesel only into vehicle tanks or Petroleum and Explosives Safety Organisation (PESO)-approved containers, with a maximum limit of 200 litres per day per customer or vehicle.

However, diesel purchased from retail outlets cannot be resold.

In addition, industrial, institutional, commercial and direct consumers have been prohibited from sourcing diesel from retail outlets and must instead procure supplies through designated consumer pumps.

The restrictions follow an unusual rise in diesel demand at retail outlets as bulk consumers increasingly shifted purchases to PSU fuel stations to benefit from lower retail prices, according to the government.

Moreover, retail diesel is currently around Rs 40 per litre cheaper than bulk diesel, as PSU OMCs continue to provide price support despite elevated global energy prices.

According to the government, public sector fuel retailers are currently absorbing losses of nearly Rs 500 crore every day on the sale of petrol, diesel and domestic LPG to protect households, farmers and other end-users amid ongoing disruptions in West Asia.

Data for May 2026 showed a sharp rise in diesel sales through PSU retail outlets, with 327 districts reporting growth of more than 10 per cent compared with the year-ago period and 80 districts recording growth above 30 per cent.

At the same time, private oil marketing companies witnessed a decline of around 58 per cent in high-speed diesel (HSD) sales during May due to higher pricing.

The ministry said instances of procurement of large quantities of diesel in jerry cans and subsequent resale had come to the government’s notice, prompting the latest intervention.

OMCs and retail outlet dealers will be responsible for enforcing compliance and preventing circumvention of the order, while state governments and Union Territories have been directed to act against black marketing and unauthorised diversion, the government stated.