India curbs bulk fuel buying at retail pumps, caps diesel sales

Officials say new measures are ensuring “fair distribution” of fuel across the country

A woman stands near plastic containers kept at a fuel station to fill fuel for the villagers' water pumps, as India faces rising oil prices following the closure of the Strait of Hormuz amid the US-Israeli conflict with Iran, in Halvad, Gujarat, India, May 22, 2026. REUTERS/Amit Dave

India has barred commercial consumers from buying gasoline and and diesel from retail fuel stations and imposed limits on daily diesel purchases to prevent local shortages, amid disruptions to global supply chains due to the war in the West Asia.

Retail fuel station dealers have been directed to sell up to 200 litres of diesel per customer or vehicle a day, according to a government order issued late on Thursday, adding the customers cannot resell the diesel.

Commercial customers, like trucking companies, have been buying diesel from retail outlets of state-run companies where prices have been cheaper than at the usual bulk supply points, and this has led to shortages at retail pumps in ‌some areas.

The government said restrictions were necessary to ensure equitable availability of petrol and diesel across the country, prevent diversion and hoarding, and maintain uninterrupted fuel supplies at fair prices.

While state fuel retailers are suffering a revenue loss of about 36.5 rupees ($0.38) per liter on diesel sales to retail customers, the fuel is sold at market rates for industrial buyers. On gasoline sales they are losing 9 rupees per liter.

India is a net exporter of refined fuels, but higher fuel sales at subsidised rates within the country are hitting the profitability of the state fuel retailers - Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp.

The three state-run fuel retailers control about 90 percent of India's more than 100,000 fuel stations.

Referring to the US-Israeli war with Iran, the government's order said geopolitical tensions have strained global petroleum supply chains, shipping logistics and the availability of petroleum products, making prudent management and conservation of supplies necessary.

The measures will remain in force for an initial period of up to 90 days unless revoked earlier through a separate order, the order said.

($1 = 95.7500 Indian rupees)