Government capped diesel sales at retail fuel dispensing stations after bulk industrial and commercial users diverted as much as 3.50 lakh tonnes of the key transport fuel in May 2026, leading to “panic buying and unusually high sales” at fuel bunks that serve the common man.
For comparison, more than 10 per cent of the total districts in India (80 districts) witnessed over 30 per cent diesel sales of industrial, commercial and bulk users shifting to retail outlets (ROs) last month. Almost 42 per cent districts (327) saw sales rising over 10 per cent in May 2026 compared to last year.
Sujata Sharma, Joint Secretary in the Oil Ministry, said that some retail outlets are witnessing “unusually high sales”. The primary reason for this is that industrial, direct, institutional and commercial consumers have shifted to ROs leading to higher sales there. In May 2026, around 42 crore litres of diesel sales shifted from bulk to retail fuel dispensing stations.
RO Prices
Sharma said that bulk diesel sales accounted for 12.6 per cent of the total direct diesel sales in May 2025. However, this share has come down to 8.3 per cent in May 2026, which means around 350,000 tonnes of diesel sales by bulk users was diverted to ROs.
Another reason is that diesel at ROs is cheaper by ₹40-42 per litre compared to the fuel being sold at the dedicated dispensing stations for industrial, commercial and bulk users. In Delhi, diesel is priced at ₹95.20 a litre at retail pumps, while bulk diesel sales are priced at ₹134.50 a litre.
As per the Ministry, private OMC sales exhibited a decline of around 58 per cent in HSD sales during May 2026 due to higher prices fixed by them.
On June 11, the Oil Ministry through a notification mandated that a retail fuel outlet can sell up to 200 litres of diesel per person per day to curb black marketing and hoarding by unscrupulous elements.
Govt Action
Last month (May 29), the Ministry said that around 156 districts witnessed over 30 per cent jump in diesel sales. Also, 6 districts witnessed sales doubling.
The Oil Ministry official emphasised that enforcement has been ramped up. Since March, 1,330 FIRs have been registered in LPG cases with 311 arrests and 75,960 cylinders seized. For petrol and diesel, 12,303 litres of petrol and 91,263 litres of diesel were seized since May 27, with 50 FIRs and 49 arrests.
On the peace deal between Iran and the US, Sharma said “If the issue is resolved at the Strait of Hormuz, it is good for everyone. Supplies will definitely improve.”
The PSU OMCs are currently incurring an under recovery of around ₹700 per 14.2 kg domestic liquefied petroleum gas (LPG) cylinder. The under recovery of diesel and petrol is ₹27 per litre and ₹3 per litre.