The Government of India has implemented new restrictions regarding the sale of petrol (motor spirit) and high-speed diesel. According to a government notification, bulk purchases of fuel from retail petrol pumps are now prohibited; institutional and commercial consumers must procure their fuel requirements from their designated consumer pumps or captive pumps.
The government states that this measure aims to prevent the misuse and diversion of fuel sold at subsidized or retail prices. The order will remain in effect for 90 days, although the government reserves the right to withdraw or modify it earlier.
Under the new rules, petrol pump operators have been instructed not to sell more than 200 liters of diesel to a single customer or vehicle in a day. Furthermore, the resale of diesel purchased from petrol pumps has been banned. This move will tighten monitoring over the movement of fuel in large quantities.
The government stated that the decision aims to ensure that fuel sold at retail petrol pumps is primarily used by general consumers, while large institutions and commercial clients must source their fuel through authorized channels.
This restriction could impact consumers who purchase fuel in bulk. It may also affect the demand and distribution systems of oil marketing companies such as Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), and Indian Oil Corporation Limited (IOCL). Oversight of retail fuel sales by these companies is likely to increase.
Investors are also likely to keep a close watch on the stock performance of these oil marketing companies following this development.
This decision comes at a time of significant volatility in global energy markets. India is also facing supply-related pressures due to ongoing geopolitical tensions in the Middle East. Fuel prices in the country have been raised multiple times over the past few weeks. Since May 15, the price of petrol in Delhi has risen by approximately ₹4.75 per litre (about 5 percent), while the price of diesel has increased by ₹4.82 per litre (roughly 5.49 percent). The primary reason cited for this is the continuous rise in crude oil prices in the international market.
The recent price hike follows ongoing conflicts in the Middle East, which have disrupted global maritime trade routes. Oil supplies passing through the Strait of Hormuz, in particular, have been affected; this route handles about one-fifth of the world’s oil trade. Supply disruptions have driven up crude oil prices in the international market.
While most countries quickly passed the burden of increased costs on to consumers, India kept domestic fuel prices stable for an extended period. According to government officials, for the first 76 days following the disruption in the Hormuz route, India was the only major economy that did not alter fuel prices. Price revisions were initiated only after this period.
