Government lifts restrictions on bulk fuel purchases at retail pumps

New Delhi: The government has lifted curbs on petrol and diesel sales at retail fuel stations following a sharp decline in global oil prices, which has significantly narrowed the gap between bulk and retail rates.

The oil ministry has withdrawn its June 12 order that barred bulk consumers from buying petrol and diesel at retail outlets and capped diesel sales at pumps at 200 litres per vehicle or customer per day.

"The central government, on reviewing the prevailing supply situation of petroleum products in the country, is satisfied that it is no longer necessary in the public interest to continue with the directions contained in the said order," the ministry said in a notification on Monday. The decision will take effect on July 1.

Global crude oil prices have fallen about 20% over the past month, pulling down international prices of diesel and petrol. The decline has already narrowed the gap between retail and bulk diesel prices to about ₹25 per litre, from around ₹40 in the first half of June. Following the July 1 price revision, the differential is expected to narrow further, according to industry executives.

The restrictions were imposed after the outbreak of the Iran war sent crude oil and refined fuel prices soaring. State-run fuel retailers responded by raising diesel prices for bulk consumers more quickly and by a much larger margin than pump prices for retail customers. At one stage, the gap between bulk and retail diesel prices widened to about ₹50 per litre. Although retail pump prices were subsequently raised by about ₹8 per litre, the differential remained wide enough to encourage many bulk consumers to buy fuel from retail outlets instead.

The resulting surge in demand at pumps in several localities led to supply disruptions and inconvenience for retail customers. The government invoked the Essential Commodities Act to prevent bulk buyers from flocking to retail outlets and capped diesel sales per customer.