The government on Wednesday said the country has “more than adequate” supplies of petrol and diesel to meet domestic demand, asserting that there is no supply shortage even as it warned against the diversion of subsidised retail fuel for industrial use.
India, the world’s fourth-largest refining hub with an annual refining capacity of 258.1 million tonnes across 22 refineries, produced enough fuel to meet domestic consumption of 243.2 million tonnes in FY26 while exporting 61.5 million tonnes of petroleum products, the oil ministry said in a statement.
“Union Petroleum and Natural Gas Minister Hardeep Singh Puri has been in continuous coordination with public sector oil marketing companies (OMCs), state governments and industry bodies to ensure uninterrupted supply,” it said.
The ministry said a review meeting with chief secretaries of states and Union Territories, as well as industry bodies Federation of Indian Chambers of Commerce and Industry and Confederation of Indian Industry, found “no scarcity of petroleum products” on the ground. It added that any apparent tightness in certain pockets stemmed from “arbitrage”, not supply constraints.
The government said state-run OMCs are currently absorbing losses of about Rs 550 crore per day on petrol, diesel and domestic LPG to shield consumers from the full impact of volatile international prices amid tensions in West Asia.
According to the statement, this subsidy buffer is intended for households, commuters and farmers purchasing fuel through retail outlets. However, it warned that industrial buyers diverting purchases from bulk channels to retail pumps were taking advantage of the pricing cushion, distorting local availability and creating artificial pressure at fuel stations.
“There is no scarcity of any petroleum product. There is, in pockets, a pattern of arbitrage that is creating the appearance of one,” the statement said.
The ministry also pointed to a shift in market share, noting that private fuel retailers have seen an around 38 per cent decline in high-speed diesel sales this month, while bulk industrial offtake through PSU OMCs has fallen by about 29 per cent, with those volumes reportedly moving to retail outlets.
The government said it has asked industry associations to sensitise members against such practices and urged states and Union Territories to deploy special enforcement squads to curb hoarding, black marketing, unauthorised storage and diversion of petroleum products under relevant legal provisions.
Reaffirming supply stability, the government said India’s refining capacity, coordinated operations of public sector fuel retailers and Centre-state cooperation together form a “working architecture of energy security”.
It urged citizens to rely on official communication and avoid rumours that confuse “arbitrage-driven distortions” with actual fuel shortages.
The ministry said states and Union Territories have also been requested to form special squads and take strict action against malpractice by bulk consumers and hoarders, including black marketing, unauthorised stocking and diversion of petroleum products meant for retail consumers, under the provisions of the Essential Commodities Act and related control orders.
“The government remains fully seized of the international situation. India’s refining strength, the disciplined operation of the Public Sector OMCs and the active coordination across Centre, states and industry constitute the working architecture of energy security during this period,” the statement added.
Petrol and diesel prices have risen by about Rs 7.5 per litre, while CNG prices have increased by Rs 6 per litre, as part of the higher energy costs triggered by the Iran war are being passed on to consumers.
(With inputs from PTI)
