New Delhi: The government on Wednesday said the country has "more than adequate" supplies of petrol and diesel to meet all domestic demand, asserting that no supply shortage exists even as it warned against diversion of subsidised retail fuel into industrial use.
India, the world's fourth-largest refining hub with 258.1 million tonnes of annual capacity across 22 refineries, produced sufficient 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.
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A review of the situation with chief secretaries of states and Union Territories, as well as industry bodies FICCI and CII, found "no scarcity of petroleum products" on the ground, the ministry said, adding that any apparent tightness in pockets stems from "arbitrage", not supply constraints.
The government said state-run OMCs are absorbing losses of about Rs 550 crore per day on petrol, diesel and domestic LPG to shield retail consumers from full international price pass-through amid volatility linked to West Asia tensions.
This subsidy buffer, it said, is intended for households, commuters and farmers using retail pumps.
However, it warned that industrial buyers diverting purchases from bulk channels to retail outlets are capturing this pricing cushion, distorting local availability and creating artificial pressure at fuel stations.
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"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 noted a shift in market share, with private fuel retailers seeing a roughly 38 per cent decline in high-speed diesel sales this month, while bulk industrial offtake through PSU OMCs has fallen about 29 per cent, volumes that are 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 form a "working architecture of energy security".
It urged citizens to rely on official communications and avoid rumours that confuse "arbitrage-driven distortions" with actual fuel shortages.
It said the states/UTs have been requested to form special squads and take strict action against malpractice of bulk consumers and hoarders taking supplies meant for retail consumers, black marketing, unauthorised stocking and diversion of petroleum products under relevant provisions of Essential Commodities Act and Control orders issued thereunder.
"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 about Rs 7.5 per litre and CNG by Rs 6 a litre as a part of the increased cost of energy caused by the Iran war is passed on to consumers. PTI
