Government Bars Industrial and Commercial Users from Buying Petrol and Diesel at Retail Pumps
The Ministry of Petroleum and Natural Gas issued the Motor Spirit and High Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026 on June 11, 2026.
Industrial, commercial, and institutional users are now prohibited from purchasing petrol and diesel at retail petrol pumps; they must source fuel through bulk sale points or their own consumer pumps.
Diesel sales at retail outlets are capped at 200 litres per customer or vehicle per day; resale of retail-purchased fuel is prohibited.
The government cited "abnormal increases in sales" driven by large users exploiting the price gap between retail and bulk fuel.
Restrictions are operative for an initial 90-day period, with scope for extension.
State governments and union territories are directed to enforce the order, including action against hoarding and black marketing.
Essential Commodities Act, 1955: Section 3 Powers
The Essential Commodities Act, 1955 provides the Central Government with broad powers under Section 3 to regulate the production, supply, distribution, and trade of essential commodities in the public interest. The Act covers petroleum products including petrol (motor spirit) and high-speed diesel.
The June 2026 order is a Section 3 control order restricting distribution channels — specifically directing bulk users away from retail outlets — to prevent artificial demand spikes from depleting retail stocks.
Petroleum and Natural Gas Regulatory Board (PNGRB)
The Petroleum and Natural Gas Regulatory Board was constituted on March 31, 2006 under the PNGRB Act, 2006. It is the statutory downstream regulator for the petroleum and natural gas sector.
While PNGRB regulates the downstream infrastructure, emergency supply controls are invoked through the ECA route — a parallel legal track that the Ministry uses when market disruption threatens supply to end consumers.
Fuel Pricing and the Retail-Bulk Price Differential
Since June 2017, India has followed a daily dynamic pricing regime for petrol and diesel at retail outlets, with prices linked to international crude benchmarks. For direct/bulk consumers, oil marketing companies charge separate rates closer to import parity.
Key Details
- In Delhi as of June 2026: retail diesel ₹95.20/litre, bulk diesel ₹134.50/litre — a differential of ~₹39/litre.
- This gap arose after OMCs moderated retail prices amid supply disruptions from the West Asia crisis (February 2026) while maintaining market-linked bulk rates.
- Large consumers rerouted bulk procurement to retail pumps to exploit the price gap, straining local retail supply.
- The restriction effectively forces bulk users back to their designated supply channels, restoring normal retail availability.
The entire rationale for the order rests on eliminating the arbitrage that bulk users exploited when retail prices were held below bulk rates during the supply disruption period.
- Order name: Motor Spirit and High Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026
- Issued by: Ministry of Petroleum and Natural Gas, June 11, 2026
- Legal authority: Essential Commodities Act, 1955 (Section 3)
- Covered products: Motor spirit (petrol) and high-speed diesel (HSD)
- Diesel retail cap: 200 litres per customer/vehicle per day
- Restriction period: Up to 90 days, extendable
- Price differential (Delhi): Retail ₹95.20 vs. bulk ₹134.50 per litre (diesel)
- PNGRB constituted: March 31, 2006 (PNGRB Act, 2006)
- Dynamic pricing introduced: June 2017 (daily revision by OMCs)
- India's crude import dependence: Over 85% of requirements