Fuel retail outlets in certain regions are experiencing supply shortages following a significant shift by industrial and commercial consumers, who have abandoned bulk diesel procurement in favour of cheaper retail outlets operated by public sector oil marketing companies.
“Bulk supplies of diesel are shifting to retail. Demand is shifting to government companies, and we have sufficient supplies,” said Sujata Sharma, Joint Secretary in the Oil Ministry.
She pointed out that sales at ROs in some regions have jumped 20-30 per cent due to industrial buyers queuing, as the price difference compared to retail consumers is around ₹40-42 per litre. Besides, consumption by the farm sector has also increased.
“Petrol pumps generally have stocks of 2-2.5 days, and if they witness 20-30 per cent demand growth, they may temporarily face some (supply) issues. There are last-mile logistics connectivity issues,” she explained.
Sharma emphasised that India has sufficient supplies of petrol, diesel, LPG and natural gas despite global geopolitical tensions impacting imports, and said the government has taken steps to reduce the burden on citizens.
LPG production up
India’s production of liquefied petroleum gas (LPG) rose marginally from around 45,000-46,000 tonnes per day (TPD) last month to roughly 46,000-47,000 TPD currently, which could be due to the resumption of Nayara Energy’s Vadinar refinery last week after maintenance.
Sharma said “We have a sufficient supply of crude oil, natural gas, petrol, and diesel. Our refineries are operating at optimum capacity to meet the country’s demand. Furthermore, LPG production has been ramped up at the refineries, with around 46,000-47,000 TPD of LPG being produced in the country.”
LPG supply remains “stable”. In the last three days, 1.34 crore domestic LPG cylinders were delivered against 1.32 crore bookings, with 96 per cent deliveries completed using DAC (Delivery Authentication Code), she added.
Commercial LPG supply since 1 May stood at around 13,32,000 tonnes, while 23,588 tonnes were sold in the last three days. Auto LPG sales stood at 963 tonnes, and around 18.87 lakh 5-kg cylinders were sold, he said.
Production by the world’s second largest LPG consumer had plateaued at around 46,000-47,000 TPD in April 2026, compared to roughly 50,000 TPD in the last week of March.
This decline was largely due to Nayara Energy’s Vadinar refinery going into maintenance and the OMCs re-prioritising some streams of C3 and C4 molecules for petrochemicals production .With Nayara Energy’s refinery coming online after a month-long maintenance, it is expected that India’s LPG production will rise to around 48,000-48,500 TPD.
In the natural gas segment since March, Sharma pointed out that 7.64 lakh PNG connections have been gasified, infrastructure has been created for 2.81 lakh connections, and 7.99 lakh new customers have been registered.
Published on May 21, 2026