Govt insists on adequate petrol, diesel supplies; warns against industrial diversion

New Delhi: The Centre on Wednesday said that the country has "more than adequate" stocks of petrol and diesel to meet all domestic demand, stressing there is no supply shortage despite localised tightness at some retail outlets.

The Ministry of Petroleum and Natural Gas said India’s refining sector — the world’s fourth-largest with an annual capacity of 258.1 million tonnes across 22 refineries — produced enough fuel to cover domestic consumption of 243.2 million tonnes in FY26 while exporting 61.5 million tonnes of petroleum products.

"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," the ministry said in a statement.

A high-level review involving chief secretaries of states and Union Territories, along with industry associations FICCI and CII, confirmed "no scarcity of petroleum products" on the ground.

Any apparent shortages in certain pockets are due to "arbitrage" rather than actual supply constraints, it added.

The government noted that state-run OMCs are currently absorbing losses of around Rs 550 crore per day on petrol, diesel, and domestic LPG to protect retail consumers from the full impact of volatile international prices, particularly amid tensions in West Asia linked to the Iran war.

"This subsidy buffer is intended for households, commuters and farmers using retail pumps," the statement emphasised.

However, it warned that some industrial buyers are diverting purchases from bulk supply channels to retail outlets to exploit the lower subsidised prices, distorting 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 ministry said.

Market data cited in the statement showed a roughly 38 per cent decline in high-speed diesel sales by private fuel retailers this month, while bulk industrial offtake through PSU OMCs has dropped about 29 per cent, with volumes reportedly shifting to retail pumps.

To address the issue, the government has asked industry associations to sensitise members against such practices. It has also urged states and Union Territories to deploy special enforcement squads to curb hoarding, black marketing, unauthorised storage, and diversion of petroleum products under the Essential Commodities Act and related control orders.

The ministry reaffirmed that India’s robust refining capacity, coordinated operations of public sector retailers, and Centre-state-industry cooperation form a "working architecture of energy security.

"It appealed to citizens to rely on official communications and avoid spreading rumours that confuse arbitrage-driven distortions with genuine fuel shortages. Petrol and diesel prices have risen by about Rs 7.5 per litre and CNG by Rs 6 per litre recently as part of the pass-through of higher international energy costs triggered by the Iran conflict.