Government Withdraws Petrol, Diesel Sale Restrictions as Fuel Supply Normalises

The Centre has withdrawn temporary restrictions on the sale and distribution of petrol and diesel imposed earlier this month to prevent hoarding and black marketing amid supply disruptions triggered by the West Asia crisis. The rollback will take effect from July 1, following a review that found the domestic fuel supply situation had significantly improved.

Supply Situation Stabilises

In a statement issued on Monday, the Ministry of Petroleum and Natural Gas said: "The Ministry of Petroleum and Natural Gas has withdrawn the temporary regulatory measures governing the sale and distribution of Motor Spirit (MS) and High Speed Diesel (HSD) through retail outlets of Public Sector Oil Marketing Companies with effect from 1st July, 2026."

The ministry noted that during the disruptions linked to the West Asia crisis, the government shielded consumers from rising international fuel prices by keeping retail petrol and diesel prices stable. However, the resulting gap between retail and bulk fuel prices encouraged some industrial, commercial and institutional consumers to purchase fuel from retail outlets.

According to the ministry, this led to instances of "diversion, hoarding and black marketing, which affected the equitable distribution of fuel".

Why the Restrictions Were Imposed

To address the situation, the government introduced temporary regulatory measures on June 12, 2026. These included a cap of 200 litres of High Speed Diesel (HSD) per customer or vehicle per day at retail outlets and a requirement for industrial, institutional and commercial consumers to procure fuel through designated consumer pumps rather than retail stations.

The ministry said the measures were intended to curb black marketing, hoarding and diversion while ensuring uninterrupted fuel availability for ordinary consumers.

Restrictions Withdrawn From July 1

Following a review of fuel availability across the country, the government concluded that the restrictions were no longer necessary.

"Following a review of the supply situation of petroleum products in the country, the Government has concluded that the temporary regulatory measures are no longer required in the public interest. Accordingly, the Order dated June 12, 2026 stands withdrawn with effect from July 1, 2026," the ministry said.

The government added that the temporary measures had succeeded in ensuring adequate supplies of petrol and diesel nationwide while protecting retail consumers from shortages.

The withdrawal of the curbs reflects the improvement in fuel availability and the restoration of normal supply arrangements. With global crude oil volatility easing and domestic logistics stabilising, bulk consumers can now return to regular procurement channels while retail fuel outlets resume unrestricted sales.

The move also highlights the government's strategy of deploying targeted and time-bound interventions during periods of external disruption while avoiding long-term market distortions.

(With inputs from ANI)