**Executive Summary**
The Ministry of Petroleum and Natural Gas notified the "Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026," effective June 12, 2026. This temporary 90-day measure aims to curb diesel hoarding and black marketing caused by price arbitrage between retail and bulk fuel. The order establishes a 200-litre daily limit per customer at retail outlets to ensure fuel availability for genuine retail consumers.
**Key Points / Main Content**
**Regulatory Restrictions and Supply Limits**
* Retail outlets are restricted to dispensing a maximum of 200 litres of diesel per day per customer or vehicle.
* Diesel must be dispensed exclusively into vehicle tanks or containers approved by the Petroleum and Explosives Safety Organization (PESO).
* The resale of diesel purchased from retail outlets is strictly prohibited.
**Prohibitions on Bulk Consumers**
* Industrial, institutional, and commercial consumers are prohibited from procuring fuel from retail outlets.
* Bulk consumers must source their requirements through dedicated consumer pumps rather than retail channels.
* These measures address the current ₹40 per litre price difference between retail and bulk diesel that has led to unauthorized procurement by large-scale users.
**Market Context and Rationale**
* PSU Oil Marketing Companies (OMCs) are currently absorbing losses of approximately ₹500 crore per day to maintain affordable retail prices for households and farmers.
* Uneven demand growth was recorded in May 2026, with some districts seeing diesel sales growth exceeding 30% due to the diversion of bulk volumes to retail outlets.
* The government clarified that there is no shortage of fuel; the order is a regulatory step to maintain energy security and protect retail supply chains.
**Compliance and Enforcement**
* OMCs and Retail Outlet Dealers are held responsible for ensuring compliance and preventing the circumvention of these rules.
* State governments and Union Territory administrations are directed to take action against malpractices such as black marketing and unauthorized diversion.
* Violations are subject to penalties under the Essential Commodities Act, 1955, and other applicable laws.
**Impact Analysis**
**Retail Consumers (Individuals, Farmers, Households)**
**Impact**
They are protected from intermittent supply issues and localized shortages. The 200-litre cap is designed to exceed the needs of standard private vehicles, ensuring minimal disruption to daily use.
**Action Required**
Must adhere to the 200-litre daily limit and ensure any external containers used for fuel are PESO-approved.
**Bulk/Industrial/Commercial Consumers**
**Impact**
These entities are barred from accessing cheaper retail fuel and must pay market-linked prices at dedicated pumps. This eliminates the benefit they were receiving from retail price arbitrage.
**Action Required**
Must immediately cease procurement from retail outlets and shift all fuel sourcing to dedicated institutional consumer pumps.
**Oil Marketing Companies (OMCs) and Retail Dealers**
**Impact**
They carry the burden of monitoring sales and are liable for any unauthorized diversions or violations occurring at their outlets.
**Action Required**
Implement strict monitoring of dispensing volumes, verify customer types, and report any attempts to hoard or resell fuel.
**State and UT Administrations**
**Impact**
They are granted the authority to enforce the order and protect the interests of the general public through legal oversight.
**Action Required**
Must mobilize administrative and law enforcement machinery to conduct inspections and penalize violators under the Essential Commodities Act.
Key Entities Referenced
Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026: The central regulatory order notified to curb black marketing and hoarding by restricting diesel sales at retail outlets to a maximum of 200 litres per day.
Ministry of Petroleum & Natural Gas: The primary government ministry responsible for notifying the control order and overseeing fuel supply regulations.
Essential Commodities Act, 1955: The legislation under which violations of the fuel supply order are subject to penalties and legal enforcement.
Public Sector Oil Marketing Companies (PSU OMCs): State-owned entities, including Indian Oil, Bharat Petroleum, and Hindustan Petroleum, directed to implement and ensure compliance with the fuel dispensing restrictions.
Ministry of Petroleum & Natural Gas
Government notifies control order to curb black
marketing and hoarding of diesel by
unscrupulous elements
प्रव तथ: 12 JUN 2026 2:57PM by PIB 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.
These regulations are temporary measures, initially valid for up to 90 days, ensuring diesel availability to
all retail consumers.
The current situation is one of uneven extraordinary demand growth in some retail outlets due to shifting
of bulk diesel volume to PSU Oil Marketing Retail Outlets. This is driven by industrial and direct or
institutional and commercial consumers who have been shifting their procurement from their dedicated
consumer pumps to retail outlets due to the difference between bulk and retail diesel prices. The other
reason is that private Oil Marketing companies’ sales exhibited a decline of around 58% in HSD sales
during May 2026 due to higher prices fixed by them.
The data for the month of May 2026, as compared to the corresponding period last year, reveals a
significant surge in diesel sales through PSU OMCs Retail outlets wherein 327 districts recorded more
than 10% growth, with 80 districts seeing a growth exceeding 30%.
The new regulatory measures are specifically designed to protect retail consumers from inconvenience
caused by intermittent supply issues at retail outlets. These measures will not affect citizens in any way
given the fact that for the average person driving a car or riding a two-wheeler, the 200-litre cap is far
beyond what any private vehicle would need.
The measures are aimed at large/bulk consumers who should not be procuring diesel from Retail Outlets
to take undue advantage of the price arbitrage. Blatant instances of procurement of large quantities of
diesel in jerry cans, and its resale have come to the notice of Government. This order will enable strict
action against such buyers/operators, dealers and officers who are involved in this black marketing and
hoarding of diesel.
Prohibiting diversion of fuel from retail outlets to bulk consumers essentially means more supply stays in
the system for the retail customers.
To protect retail consumers during the ongoing West Asia disruption, PSU Oil Marketing Companies
(OMCs) are currently absorbing losses of around ₹500 crore per day on the sale of petrol, diesel and
domestic LPG. This graduated price support is intended to protect retail consumers and ensure
affordability of fuel for households, farmers and other end-users. This support is not meant for industrial
and bulk supplies, where pricing continues to track international market prices, resulting in retail diesel
being around ₹40 per litre cheaper than bulk diesel.The diversion of High-Speed Diesel (HSD) by bulk consumers has led to localized supply issues and
potential disruptions for bona fide retail customers and essential services.
Pursuant to this order, now the Central Government have issued directions to Public Sector Oil Marketing
Companies, namely Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and
Hindustan Petroleum Corporation Limited to ensure the following:
Retail outlets will dispense diesel only into vehicle tanks or PESO approved containers, with a
maximum limit of 200 litres per day per customer/vehicle. Diesel purchased at retail outlets cannot
be resold.
Industrial and direct or Institutional and commercial customers are prohibited from procuring fuel
from retail outlets and must source their requirements through consumer pumps.
Oil Marketing Companies (OMCs) and Retail Outlet Dealers will be responsible for ensuring
compliance with the prescribed restrictions and preventing any attempts to circumvent the
provisions of the Order.
State governments and Union Territory administrations have been directed to take necessary actions
against any malpractices, such as black marketing or unauthorized diversion, to ensure the interests
of the common man are protected
Violations of the Order will be subject to penalties and other legal action as provided under the Essential
Commodities Act, 1955 and applicable laws.
The "Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order,
2026" is explicitly defined as a temporary measure designed to address specific, current market
challenges.
This is not a rationing measure, and there is no shortage of petrol or diesel in the country. Notably, India
remains the world's 4th largest refiner and 5th largest exporter of refined petroleum products. The
government remains committed to ensuring uninterrupted fuel supplies protecting consumer interest and
maintaining energy security through timely and proactive measures.
***
TM
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