India Says Fuel Supplies Adequate, Warns Against Diversion

By Mahima Katal India’s government said on Wednesday that the country has more than enough petrol and diesel supplies to meet domestic demand, dismissing concerns over shortages while warning against the diversion of subsidized retail fuel for industrial use.

In a statement, the Ministry of Petroleum and Natural Gas said India’s refining network remains fully capable of meeting national energy needs despite rising global oil market volatility linked to tensions in West Asia.

India, the world’s fourth-largest refining hub, has an annual refining capacity of 258.1 million tonnes across 22 refineries. During the 2025–26 financial year, the country produced enough fuel to meet domestic consumption of 243.2 million tonnes while also exporting 61.5 million tonnes of petroleum products.

The ministry said Petroleum Minister Hardeep Singh Puri has been in continuous coordination with state governments, public sector oil marketing companies (OMCs), and industry groups to ensure uninterrupted fuel availability nationwide.

Following a review with state chief secretaries and industry bodies including FICCI and CII, the government said there was “no scarcity of petroleum products” across the country.

Officials attributed isolated supply tightness in some areas to “arbitrage," where industrial buyers purchase cheaper subsidized fuel from retail pumps instead of sourcing it through bulk commercial channels.

“The appearance of shortages in certain pockets is being created by diversionary practices, not by any actual supply constraint,” the ministry said.

According to the government, state-owned fuel retailers are currently absorbing losses of around ₹550 crore (about USD 66 million) per day on petrol, diesel, and domestic LPG in an effort to shield consumers from the full impact of higher international energy prices.

Authorities said these subsidies are intended primarily for households, farmers, and everyday commuters. However, some industrial users are reportedly exploiting the lower retail prices, placing additional pressure on fuel stations and disrupting local supply patterns.

The ministry noted that private fuel retailers recorded an estimated 38% drop in high-speed diesel sales this month, while bulk industrial fuel purchases through public sector OMCs declined by roughly 29%, indicating a possible shift toward retail purchases.

The federal government has urged industry associations to discourage such practices and asked states and union territories to form special enforcement teams to tackle hoarding, black marketing, unauthorized storage, and fuel diversion under the Essential Commodities Act.

Reaffirming India’s energy security framework, the ministry said the country’s refining strength, coordinated public-sector operations, and cooperation between central and state authorities continue to ensure stable fuel supplies.

The government also urged citizens to rely on official information and avoid rumors regarding fuel shortages.

Fuel prices in India have risen in recent weeks, with petrol and diesel increasing by around ₹7.5 per litre and compressed natural gas (CNG) by ₹6 per litre, reflecting the higher cost of energy imports amid the ongoing Iran-related geopolitical tensions.