Government issues order to curb diesel hoarding and black marketing

The Ministry of Petroleum and Natural Gas has introduced the 'Motor Spirit and High-Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026' to address black marketing and hoarding of diesel. This temporary regulation, valid for 90 days, aims to ensure uninterrupted diesel availability for retail consumers amidst rising demand and supply challenges.

The move comes in response to a surge in diesel sales at PSU Oil Marketing Companies' retail outlets, driven by bulk consumers shifting purchases from dedicated pumps to retail outlets due to price differences. Private oil companies have also reported a 58% drop in diesel sales during May 2026 due to higher pricing. Notably, 327 districts recorded over 10% growth in diesel sales, with 80 districts exceeding 30% growth compared to last year.

Under the new order, retail outlets can dispense diesel only into vehicle tanks or PESO-approved containers, with a daily cap of 200 litres per customer. Bulk consumers are prohibited from sourcing diesel from retail outlets and must use dedicated consumer pumps. Violations will attract penalties under the Essential Commodities Act, 1955.

The government aims to protect retail consumers from supply disruptions caused by bulk procurement and resale practices. PSU Oil Marketing Companies are absorbing losses of ₹500 crore daily to maintain affordability for households and farmers during the ongoing West Asia disruption. Retail diesel remains ₹40 per litre cheaper than bulk diesel.

India, as the world's fourth-largest refiner, continues to ensure energy security and uninterrupted fuel supplies through proactive measures, safeguarding consumer interests and preventing market manipulation.

Source: Press Information Bureau (Govt. of India) press release, 12 JUN 2026. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2272080