Kerala Becomes First State To Impose Fuel Restrictions: Rs 5,000 Cap On Petrol, 200L For Diesel

Kerala has reportedly become the first state where fuel outlets have introduced restrictions on bulk sales amid the economic fallout of the West Asia conflict. Customers will be allowed to purchase a maximum of 200 litres of diesel and petrol worth up to Rs 5,000 per person.

This decision has been taken due to fears of a sudden fuel shortage and to ensure better supply management amid a global economic crisis, according to a report by Mathrubhumi.

Oil marketing companies are reportedly supplying fuel to stations based on short-term demand cycles rather than longer supply windows. As a result, petrol pumps are currently receiving stocks sufficient for only a few days at a time.

Advance Payments Required For Pump Owners

Furthermore, petrol pump owners are now required to make advance payments

before placing fuel orders. Due to this financial pressure, many small pump owners are unable to procure fuel according to their actual requirements. The withdrawal of credit-based supply systems has also impacted the working conditions at fuel outlets.

Representatives from the Kerala State Petroleum Traders Association said the rules have been introduced solely to prevent fuel stocks from being completely exhausted. The state currently has around 2,500 petrol pumps, many of which depend on regular tanker deliveries ranging from 12,000 to 24,000 litres.

While distributors said there was no formal nationwide shortage, temporary disruptions could occur due to logistical delays. According to a statement by the Ministry of Defence, India currently has 60 days of crude oil supply, 60 days of Natural Gas and 45 days of LPG rolling stock.

India is among the few countries where petroleum prices have been steady, even after over 70 days since the war began. However, India’s oil marketing companies have absorbed losses of close to Rs 1,000 crore a day, with under-recoveries running to nearly Rs 2 lakh crore in the first quarter of 2026 to ease the burden on consumers, as per the Defence Ministry.

Prime Minister Narendra Modi has appealed to citizens to make small changes in their daily lives to help India deal with economic pressure caused by the ongoing conflict in West Asia, such as reducing fuel usage, resume working from home and avoiding foreign travel.