India has more than adequate petrol and diesel supplies to meet all domestic and industrial needs, the Ministry of Petroleum & Natural Gas said in a statement today.
The statement comes amid the ongoing West Asia disruption, which has triggered public concerns about fuel availability. Industrial consumers are shifting purchases from the wholesale channel to retail pumps to exploit price subsidies meant for households, according to the ministry.
There is no scarcity of any petroleum product, the statement said. What is happening instead is a pattern of arbitrage in pockets that creates the appearance of one. Public Sector Oil Marketing Companies are absorbing ₹550 crore in daily losses to protect retail consumers from full international price exposure.
Why the concern?
India is the world’s fourth largest refiner with an installed capacity of 258.1 million tonnes per annum across 22 operational refineries, according to the statement. Domestic consumption was 243.2 million tonnes in FY 2025-26, while petroleum product exports were 61.5 million tonnes in the same year.
The core issue is price arbitrage, not scarcity, the ministry said. PSU oil marketing companies have refrained from passing through the full international price into domestic retail sales to protect retail consumers: households, two-wheeler commuters, and farmers. Industrial procurement, by contrast, operates under international pricing standards.
The arbitrage game
Industrial consumers who divert purchases from the industrial channel to the retail pump capture this subsidy at the cost of the ordinary citizen, the ministry said. They also concentrate demand at the pump in a way that produces local shortages where none would otherwise exist.
Private Oil Marketing Companies are experiencing a decline of approximately 38 percent in diesel offtake during the current month due to higher rates, with this volume shifting entirely to PSU oil marketing retail outlets, the statement said. PSU bulk customer volumes have also recorded a decline of approximately 29 percent, which is migrating to retail outlets.
Petrol and diesel prices across cities
As of May 27, 2026:
- Delhi: Petrol ₹102.12/litre | Diesel ₹95.20/litre
- Mumbai: Petrol ₹111.21/litre | Diesel ₹97.83/litre
- Bangalore: Petrol ₹110.93/litre | Diesel ₹98.80/litre
- Hyderabad: Petrol ₹115.73/litre | Diesel ₹103.82/litre
Crackdown on diversion
The government has directed states to form special squads targeting illegal bulk procurement, black marketing, and hoarding under the Essential Commodities Act. Industry associations have been asked to ensure members understand both the principle and the consequences of violations. The ministry emphasizes that India’s refining capacity, disciplined PSU operations, and coordinated Centre-State-industry action constitute the architecture of energy security during this volatile period.
