Page 52 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

June 2026 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.

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