Government Cracks Down on Diesel Hoarding, Black Marketing
New temporary order limits diesel purchase at retail outlets to protect consumers
- Centre issues 90-day order to curb diesel black marketing
- Diesel purchase capped at 200 litres per day per customer at retail outlets
- Bulk consumers barred from buying fuel from retail pumps
- Violators face action under Essential Commodities Act
GG News Bureau
New Delhi, 13th June: The Ministry of Petroleum and Natural Gas has notified a new control order aimed at curbing black marketing and hoarding of diesel, introducing temporary restrictions on diesel sales through retail outlets to ensure uninterrupted availability for genuine consumers.
The Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026 has been issued for an initial period of up to 90 days and is intended to address localized supply disruptions caused by bulk consumers purchasing diesel from retail fuel stations.
According to the government, an unusual surge in diesel demand has been recorded at public sector oil marketing company (PSU OMC) retail outlets as industrial, institutional and commercial consumers shifted purchases from dedicated consumer pumps to retail outlets to take advantage of lower retail diesel prices.
Official data for May 2026 showed that 327 districts registered more than 10 per cent growth in diesel sales through PSU retail outlets compared to the same period last year, while 80 districts recorded growth exceeding 30 per cent.
Under the new regulations, retail outlets will dispense diesel only into vehicle fuel tanks or Petroleum and Explosives Safety Organisation (PESO)-approved containers, with a maximum limit of 200 litres per day per customer or vehicle. Diesel purchased from retail outlets cannot be resold.
The government clarified that the restrictions will not affect ordinary consumers, as the prescribed limit is significantly higher than the daily fuel requirement of private vehicle owners.
Industrial, institutional and commercial consumers have been directed to source diesel exclusively through designated consumer pumps instead of retail fuel stations. Oil Marketing Companies and retail outlet dealers have been tasked with ensuring strict compliance and preventing attempts to bypass the regulations.
The Centre has also directed state governments and Union Territory administrations to take action against black marketing, unauthorized diversion and other malpractices.
Officials said the move became necessary after reports of large-scale diesel procurement in jerry cans and subsequent resale, leading to localized shortages and inconvenience for retail consumers and essential services.
The government noted that PSU oil marketing companies are currently absorbing losses of around ₹500 crore per day on the sale of petrol, diesel and domestic LPG to shield consumers from global price volatility amid ongoing disruptions in West Asia. Retail diesel is presently around ₹40 per litre cheaper than bulk diesel, creating opportunities for price arbitrage.
The Ministry emphasized that the order is a temporary market-regulation measure and not a fuel rationing mechanism. It reiterated that there is no shortage of petrol or diesel in the country and that India remains the world’s fourth-largest refiner and fifth-largest exporter of refined petroleum products.
The government said it remains committed to ensuring uninterrupted fuel supplies, protecting consumer interests and maintaining national energy security through proactive measures.
