Government warns private fuel retailers over retail sales limits

The central government has made it clear that private fuel retailers cannot put limits on the volume of petrol and diesel sold at their pumps. Petroleum Secretary Neeraj Mittal stated that such caps are not allowed and the government will take up the matter directly with the companies. This response follows reports that private fuel retailers Jio-bp and Nayara Energy had started restricting diesel purchases at some of their outlets. At Jio-bp pumps, diesel purchases were capped at 50 litres per customer per day, while Nayara Energy outlets set limits ranging from 70 litres to 200 litres. According to reports, these caps were introduced after large bulk consumers like factories, telecom companies, and hotels began buying cheaper fuel from retail pumps instead of bulk sources. A gap of up to 50 rupees per litre between retail and bulk diesel prices caused this shift, with some large buyers lifting up to 600 litres in a single visit. Petroleum Secretary Neeraj Mittal stressed that the government's view has not changed and similar instructions and letters were issued in the past as well. Meanwhile, Petroleum Minister Hardeep Singh Puri noted that his ministry stays in regular touch with private retailers. Private players hold a market share of less than 10 percent in India, while public sector firms like Indian Oil, Bharat Petroleum, and Hindustan Petroleum control the vast majority of the network. Public sector companies have kept retail fuel prices unchanged since May to shield consumers from high international costs, leading to heavy losses. Ratings agency ICRA estimated that public sector retailers faced daily marketing losses of about 530 crore rupees last week. This price gap created negative margins on retail sales for private companies, prompting them to limit supplies to protect local stocks at their pumps.

Context

Private fuel retailers often face financial strain when global crude oil prices rise while domestic retail rates remain frozen by state-dominated market trends. The government expects all fuel stations to maintain steady public supplies regardless of private profit margins or shifts in bulk consumer buying patterns.