The Centre has directed states and UTs to take strict action against industrial consumers allegedly procuring fuel from retail petrol pumps instead of commercial supply channels.
The government said the practice is causing local shortages and adding to losses of nearly Rs 550 crore per day being absorbed by state-run oil marketing companies.
The crackdown comes amid repeated fuel price hikes triggered by rising global crude prices and disruptions linked to the Iran conflict and Strait of Hormuz crisis.
Centre Cracks Down on Industries Buying Fuel From Retail Petrol Pumps
States asked to form special squads as government warns diversion of fuel is worsening losses and creating local shortages
Summary
The Centre has asked states and Union Territories to crack down on industrial consumers allegedly procuring fuel from retail petrol pumps, warning that the practice is worsening losses for state-run oil marketing companies (OMCs) amid soaring global crude prices.
In a statement, the government said special squads would be formed to take action against bulk consumers and hoarders involved in black marketing, unauthorised stocking and diversion of petroleum products meant for ordinary retail buyers. Authorities have been directed to invoke provisions under the Essential Commodities Act and related control orders to curb the malpractice.
The government said the diversion of fuel purchases by industrial consumers from commercial supply channels to retail outlets was creating artificial shortages and placing additional pressure on retail fuel distribution networks.
“Industrial consumers who divert their purchases from the industrial channel to the retail pump capture this cushion at the cost of the ordinary citizen. They also concentrate demand at the pump in a way that produces local shortages where none would otherwise exist,” the statement said.
The Centre added that the ongoing practice was severely impacting the financial health of state-run OMCs, which are currently absorbing losses of nearly Rs 550 crore per day on the sale of petrol, diesel and domestic LPG.
Industry associations have also been asked to sensitise their members about the legal and economic consequences of violating fuel supply norms.
The tightening of enforcement comes amid a sharp rise in domestic fuel prices triggered by the continuing Iran conflict and disruptions in global crude supply routes, particularly the Strait of Hormuz — a critical passage for international oil shipments.
After keeping fuel prices unchanged for an extended period, the government began raising petrol and diesel rates earlier this month as international crude prices surged. Prices were first increased by Rs 3 per litre on May 15, followed by another hike of around 90 paise on May 19. Fuel prices were revised upward again on May 23, marking the third increase in less than 10 days.
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With another increase reported this week, India has now witnessed four consecutive fuel price hikes in under two weeks. Petrol and diesel prices have cumulatively risen by nearly Rs 7.5 per litre during this period, sparking concerns over inflationary pressure and rising transportation costs.
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