Government rejects retail fuel sale caps by private companies

The central government will tell private sector fuel retailers that placing limits on petrol and diesel sales at pumps is not allowed. Petroleum Secretary Neeraj Mittal stated on Thursday that the government will take up the matter because imposing such restrictions is unacceptable.

Retail Limits and Price Gaps

Private companies Jio-bp and Nayara Energy began limiting retail diesel sales at some of their pumps. This happened because of a widening gap between cheaper retail prices and global rates, alongside negative margins on retail sales. A gap of up to 50 rupees per litre between retail and bulk diesel prices prompted large industrial consumers like factories, hotels, and telecom firms to buy fuel from regular pumps instead of bulk points. Some buyers lifted up to 600 litres in one go.

Market Pressures and Company Actions

Jio-bp capped diesel sales at 50 litres per customer daily at certain outlets, while Nayara Energy set limits ranging from 70 to 200 litres. This sudden rush by bulk buyers put pressure on local fuel stocks at retail pumps. Meanwhile, three public sector giants — Indian Oil, Bharat Petroleum, and Hindustan Petroleum — control a massive market share and have kept retail prices unchanged since May to shield consumers. Ratings agency ICRA estimated last week that public sector retailers faced daily fuel marketing losses of about 530 crore rupees. Petroleum Minister Hardeep Singh Puri noted that his ministry stays in regular touch with private fuel retailers.

Context

Private fuel retailers hold a small fraction of India's fuel retail network, leaving state-owned companies with most of the pricing power. Government intervention in fuel sales typically aims to ensure steady supplies for regular vehicle owners while managing the heavy financial strain caused by volatile global oil markets.