Global diesel supply crunch drives price surge and Indian retail caps

Global diesel prices are surging due to supply disruptions from West Asia and Russia, prompting Indian private fuel retailers Jio-bp and Nayara Energy to cap diesel purchases at their outlets. The limits, ranging from 50 to 200 litres per customer, aim to manage demand from industrial buyers shifting to retail pumps. The price spike stems from a refined diesel shortage, not just higher crude costs, as the US-Iran conflict and attacks on Russian refineries cut exports. West Asian diesel exports halved between March and August, while US retail prices exceeded $6 a gallon and UK diesel hit a record 199.18 pence per litre. Reduced global refining capacity and low inventories have further tightened supply. In India, retail diesel prices have stayed unchanged since May, creating a gap of up to ₹40 a litre versus bulk fuel, driving factories and other large users to petrol pumps. Retailers say limited storage and replenishment delays necessitate the caps, though no customer shortages are reported. Future easing depends on improved global supply or refinery output.