Diesel purchase curbs spark concern across hospitals, IT parks, data centres

The government’s decision to restrict diesel sales at petrol pumps has raised alarm among hospitals, IT campuses, data centres and industries that depend heavily on diesel generators for both backup and routine power needs.

Under an order issued on 11 June, industrial, commercial and institutional consumers are barred from buying diesel at retail fuel stations. Sales to other users have been capped at 200 litres per vehicle or customer per day for up to 90 days. The move aims to conserve supplies and prevent diversion of fuel meant for retail consumers amid rising demand.

Industry executives warn the curbs could disrupt operations in sectors where uninterrupted power is critical. Hospitals, in particular, rely on diesel generators to run life-saving equipment during outages and even during routine high-risk procedures.

Data centres, IT parks and telecom facilities also depend on diesel gensets to maintain uptime commitments. Many firms routinely purchase fuel from nearby retail outlets to keep backup reserves ready, officials said.

“Many hospitals do not depend exclusively on grid electricity for critical functions. Diesel generators are an integral part of operational planning,” said a hospital executive.

IT and infrastructure operators also noted that diesel generation is sometimes cheaper than peak-hour grid tariffs, making it a key cost-management tool despite higher environmental impact.

The government said the restrictions follow “abnormal increases” in retail diesel and petrol sales, as bulk consumers shifted purchases to cheaper pump rates, risking local shortages. These consumers will now have to rely on dedicated bulk supply arrangements instead of retail stations.

Diesel prices at retail pumps currently stand at Rs 95.20 per litre in Delhi, while bulk rates are around Rs 134.50, a gap that has driven the shift in buying patterns.

Industry bodies are seeking exemptions for essential services, arguing that hospitals, telecom networks and data centres require guaranteed fuel access regardless of market conditions.

Officials said companies with existing bulk contracts may face limited disruption, but those dependent on retail purchases will need to quickly adjust procurement systems.

State-run oil firms Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) saw combined fuel demand shifts in recent months, including a 4.8 per cent rise in petrol sales and a 6.4 per cent increase in diesel consumption in May.

With PTI inputs