Petroleum Ministry Flagged; Bulk Diesel Buyers Shifting To Retail Pumps Spiking Fuel Demand.

New Delhi; May 2026: Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said in a while ago today (Thursday – 21st May 2026) that a sharp shift by bulk diesel consumers to retail petrol pumps, triggered by a price gap of Rs. 40 – Rs. 42 per litre, has led to a spike in fuel demand at several locations across India. According to Sharma, demand at some petrol pumps has increased by 20% to 30%, driven partly by the ongoing agricultural season and partly by bulk consumers purchasing diesel from retail outlets instead of bulk suppliers. Sharma has said the sudden rise in retail demand has resulted in dry-out-like situations at a few petrol pumps in certain areas.

While petrol pumps serve fuel to cars and two-wheelers, bulk buyers such as state road transport buses and telecom towers using diesel in power gensets are supposed to purchase the fuel from bulk supply points. Fuel at petrol pumps is being sold at rates below cost, while bulk supplies are normally at market price.

Sharma further stated higher demand was also being seen at state-run fuel stations because of lower prices compared with private retailers. “Petrol pumps generally have stocks of 02 to 03 days, and if they see 20% to 30% growth in demand, they may temporarily face some issues, after all, there are last-mile logistics issues in reaching fuel”, she added.

Sharma said the government is closely monitoring supplies at outlets witnessing unusually high demand and coordinating with state administrations and local police wherever required. “There is no issue in product supply. I would again appeal that citizens should not resort to panic buying and should not believe rumours. They should purchase as per the need”, Sharma said. The comments come amid concerns over fuel supplies following disruptions linked to the West Asia crisis.

“The government of India has taken all possible steps to ensure that common people face the least inconvenience”, Sharma assured. India has sufficient supplies of crude oil, petrol, diesel and LPG, while refineries are operating at ‘optimum capacity’ to meet domestic demand, she said.

India’s monthly diesel production stands at around 10 million tons against consumption of about 8.5 million tons, she added. On cooking gas supplies, Sharma said the government had ramped up domestic LPG production to offset disruptions linked to the West Asia crisis. “We are an import-dependent country. 60% of our LPG demand is imported and of this, 90% comes through the Strait of Hormuz”, which is effectively shut because of the West Asia conflict, she said.

According to Sharma, refineries have already increased their LPG output by diverting streams previously used for petrochemicals production. “The refineries are producing 46,000 tons to 47,000 tons of LPG every day”, she said. She also said the government had previously compensated state-run oil marketing companies for losses on subsidised LPG sales. “In 2023, Rs 22,000 crore was provided, and last year in 2025 Rs 30,000 crore was provided to them”, Sharma said. “When there was a need, the government of India supported the Oil Manufacturing Companies (OMCs)”.

Team Maverick.