Petroleum ministry to intervene as private refiners cap diesel sales

New Delhi: The Centre will raise the issue of recent diesel sales restrictions with private refiners and ask them to roll back the move, said Neeraj Mittal, secretary, Union ministry of petroleum and natural gas. Addressing reporters on Thursday, Mittal said no oil marketing company is permitted to restrict fuel sales.

Private operators Jio-bp and Nayara Energy have both capped diesel sales. Mint first reported that Jio-bp reinstated a limit of 50 litres per transaction. Bloomberg recently reported that Nayara has similarly capped diesel sales at 70–200 litres per transaction.

Responding to a question on the restrictions, the secretary said: “Nobody is allowed to put a cap on sales. So, if they are putting a cap on sale, we will take it up. We will tell them that it is not acceptable, it is not done. In the past also, letters have been issued. So, the same thing applies even today. There is no change in the government’s view on this.”

Union petroleum and natural gas minister Hardeep Singh Puri said the government is “always in touch with” private fuel retailers.

Reliance Industries Ltd-backed Jio-bp, which accounts for a fifth of India’s roughly 10,000 private fuel retail pumps, had previously restricted diesel sales and imposed a diesel procurement quota for its pumps in April. India has a total of around 100,000 fuel pumps, with the state-run oil marketing companies (OMCs) owning about 90%. Rosneft-backed Nayara Energy has more than 7,000 petrol pumps in the country.

Queries emailed to Jio-bp and Nayara Energy on Thursday evening were not immediately answered.

Export dynamics and demand

Both Jio-bp and Nayara Energy are also key exporters of petroleum products. A recent report by Finnish think tank Centre for Research on Energy and the Clean Air (CREA) said Russia imported a record 172,000 tonnes of petroleum products in August, with most of the supplies coming from India. It noted that supplies from Nayara’s Vadinar refinery comprised about 70% of Russia’s imports, followed by supplies from South Korea.

In a bid to disincentivize exports, the government imposed a windfall tax on the export of petroleum products from March. The tax is revised fortnightly. On Wednesday, the government cut the windfall tax on diesel exports from ₹20 per litre to ₹16.

As the world’s third-largest crude oil importer and a top consumer of petrol and diesel, India has seen its demand for petroleum products hit record highs in recent years. According to data from the Petroleum Planning & Analysis Cell, petrol sales increased 7% year-on-year to 22.67 million tonnes over April-September, while diesel sales were up 4.85% at 47.89 million tonnes.

In September, petrol and diesel sales rose 7.21% and 4.86%, respectively, to 3.64 million tonnes and 7.12 million tonnes. Aviation turbine fuel (ATF), however, saw marginal 0.39% growth during the first six months of FY27 to 4.43 million tonnes. In September, sales were largely flat at 720,000 tonnes.

LPG sales drop

LPG sales, however, have taken a hit this year, primarily due to supply disruptions from West Asia, traditionally India’s largest source of cooking gas. During April-September, LPG sales dropped nearly 15% to 13.8 million tonnes, including a 9.15% year-on-year decline last month to 2.64 million tonnes. Because India imports about 90% of its crude oil, global supply shocks and price swings significantly impact the domestic market.

Speaking about the current price trend in crude oil, petroleum minister Puri noted that international prices have eased from recent highs and may fall further. “Why don’t you rejoice in the fact that the price of Brent is down to (around) $95? And it’s available also. All these concerns should come if the prices are higher. But now, the prices hopefully will come down,” Puri said.

Around 7pm on Thursday, the December contract of Brent on the Intercontinental Exchange was trading at $99.93 per barrel, up 2.01% from its previous close. It has eased from a recent high of around $110 per barrel amid reports of easing supplies from West Asia.

Both the minister and the secretary spoke to reporters on the sidelines of the launch of the GOBARdhan, the national circular bioenergy scheme. Approved by the Union cabinet in August, the scheme has a total outlay of ₹23,731 crore.