Centre To Tell Private Fuel Retailers Not To Cap Petrol And Diesel Sales: Report

The Centre will ask private fuel retailers not to restrict petrol or diesel sales, Oil Secretary Neeraj Mittal has said, as reported by PTI, after Jio-bp and Nayara Energy imposed purchase limits at some outlets amid a widening price gap that has prompted industrial users to buy cheaper diesel from retail pumps.

This comes after Jio-bp and Nayara Energy announced purchase limits at some outlets last month as factories, telecom companies, hotels, hospitals and other bulk consumers increasingly turned to retail pumps to buy diesel.

The rush has been driven by a price difference of as much as ₹50 a litre between retail diesel and fuel sold to bulk consumers. This has encouraged large users to shift their purchases to petrol pumps.

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“Nobody is allowed to cap fuel sales. It is not acceptable; it is not done,” Mittal was quoted as saying in the report.

Jio-bp limited diesel purchases to 50 litres per customer per day at some outlets, while purchase limits at Nayara Energy stations range from 70 litres to 200 litres.

Oil Minister Hardeep Singh Puri said his ministry is “in touch” with private fuel retailers but did not provide further details.

Retail petrol and diesel prices have remained unchanged since May even as international crude prices have risen. Prices for industrial and other bulk consumers, which are more closely linked to international market rates, have increased more sharply.

The resulting difference between retail and bulk diesel prices has widened to as much as Rs 50 a litre, leading some large consumers to purchase diesel from retail stations instead of dedicated bulk outlets, according to people in the industry.

Some industrial users are buying 400 to 600 litres at a time from retail outlets, considerably more than the volumes normally purchased by individual motorists.

The increased demand is putting pressure on inventories at individual petrol pumps. These outlets have limited storage capacity and may need at least a couple of days to replenish supplies through the fuel distribution network.

Jio-bp, a joint venture between Reliance Industries and Britain’s BP, said earlier this week that all its mobility stations were operational and adequately stocked, according to the report.

Nayara Energy said it continued to maintain fuel supplies across its nationwide dealer network and was focused on ensuring optimum supplies to more than 7,000 stations and other channels, including bulk customers.

Petrol and diesel prices are formally linked to the market, but retail prices have often not changed immediately or completely in line with international crude prices. State-controlled fuel retailers have also traditionally moved pump prices together, particularly when prices are revised.

The current divergence has created an incentive for industrial consumers to shift their purchases from bulk channels to retail outlets. This could put further pressure on stocks at petrol pumps that primarily cater to motorists.

Notably, if the price gap continues, the situation could highlight a structural mismatch between retail and bulk fuel pricing.