New Delhi: The Ministry of Petroleum and Natural Gas has withdrawn the temporary restrictions on the sale and distribution of petrol and diesel at retail outlets run by public sector oil marketing companies (OMCs), including the cap of 200 litres of high speed diesel (HSD) per customer or vehicle a day, with effect from July 1.
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In a statement on Monday, the ministry said the measures, imposed on June 12 as the West Asia crisis drove up international fuel prices, were no longer warranted after a review of the country's petroleum supply position. "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," it said. "Accordingly, the Order dated 12th June, 2026 stands withdrawn with effect from 1st July, 2026."
The rollback comes less than three weeks into a window that, by the terms of the original order, could have run for up to 90 days.
The restrictions were a response to a distortion created by the government's own price policy during the crisis. As international prices spiked, state-run OMCs held retail pump rates steady to protect households and small consumers, while bulk supplies continued to be sold at market-linked rates. That opened a wide gap between the two channels.
"During the period of disruptions arising from the West Asia crisis, the Government continued to shield retail consumers from the sharp increase in international fuel prices by maintaining stable retail prices of petrol and diesel," the ministry said. "This led to a significant price difference between retail fuel prices and those applicable to bulk consumers."
At the time the curbs were introduced earlier in June, retail diesel was being sold around Rs 40 a litre cheaper than bulk supplies, and OMCs were absorbing losses of nearly Rs 500 crore a day on petrol, diesel and domestic LPG to hold the line on consumer prices, the ministry had said. With retail fuel cheaper, bulk users, among them industrial units, telecom towers, trucking operators and state transport fleets, began buying at ordinary pumps rather than through their designated supply points. Industry data for May 2026 showed diesel sales at PSU outlets growing more than 10 percent year-on-year in 327 districts and more than 30 percent in 80 districts, even as private retailers, who had raised prices, saw HSD volumes fall sharply.
The government said this diversion was distorting fuel distribution. The shift, the ministry said, led to "instances of diversion, hoarding and black marketing, which affected the equitable distribution of fuel."
The June 12 order capped sales at 200 litres of HSD per customer or vehicle a day at retail outlets and barred industrial, institutional and commercial consumers from buying at pumps, directing them instead to designated consumer pumps. Under the order, as reported when it was notified, retail outlets could dispense diesel only into vehicle tanks or approved containers, resale of pump-bought fuel was prohibited, and OMCs and dealers were made responsible for compliance.
The ministry said the steps were calibrated to curb misuse without disrupting ordinary buyers. "The measures were aimed at preventing black marketing, hoarding and diversion of diesel while ensuring uninterrupted availability of petrol and diesel to retail consumers," it said.
The ministry framed the withdrawal as a sign that supply had returned to normal. "The temporary measures helped ensure adequate availability of petrol and diesel across the country while safeguarding the interests of retail consumers," it said. "Their withdrawal reflects the improvement in the supply situation and the restoration of normal supply arrangements."
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The easing follows a retreat in global crude prices from their crisis peaks, after tensions in West Asia de-escalated and a negotiating period between the United States and Iran was announced in late June. From July 1, both the 200-litre diesel cap and the requirement for bulk consumers to source fuel away from retail outlets cease to apply.