India has lifted restrictions on the retail sale of petrol and diesel to commercial buyers from July 1, ending emergency measures imposed earlier to safeguard domestic fuel supplies during disruptions to global energy trade caused by the conflict in the Middle East.
The government had barred commercial users from purchasing fuel at retail outlets and capped diesel sales at 200 litres per customer or vehicle per day after tensions in the region threatened supply chains and raised concerns over local shortages.
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The restrictions, which came into force in June, were aimed at ensuring equitable availability of petrol and diesel, preventing diversion and hoarding, and maintaining uninterrupted fuel supplies at fair prices.
With the situation stabilising, the curbs have now been withdrawn, allowing commercial consumers such as transport operators and industrial users to once again purchase fuel from retail outlets without quantity restrictions.
The June order was prompted by a widening price gap between retail fuel and bulk supplies. Commercial consumers, including trucking companies, had increasingly shifted purchases to retail outlets operated by state-run oil marketing companies, where diesel was significantly cheaper than at bulk supply points.
Diesel, which accounts for around 40% of India's fuel demand, was being sold to industrial users at nearly Rs 40 per litre more than retail prices, creating an arbitrage that led to supply pressures at fuel stations in several parts of the country.
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The surge in retail demand disproportionately affected state-run retailers Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp, which together operate about 90% of India's more than 100,000 fuel stations. While diesel sales by private retailers, which priced fuel closer to market rates, dropped sharply, sales at state-run outlets rose significantly during the period.
India, a net exporter of refined petroleum products, had introduced the temporary restrictions to ensure uninterrupted availability of fuel across the country as geopolitical tensions disrupted global energy markets.
The lifting of the curbs signals the government's assessment that domestic fuel supplies have normalised and that emergency restrictions are no longer required.
