FISME To Seek Relief For MSMEs Affected By New Fuel Procurement Restrictions

New Delhi, Jun 15 (KNN) The Federation of Indian Micro and Small & Medium Enterprises (FISME) is set to approach the Centre seeking relief for micro and small enterprises affected by newly notified restrictions on diesel and petrol procurement.
 
New Fuel Procurement Rules Raise MSME Concerns
The concerns stem from the Ministry of Petroleum and Natural Gas' Motor Spirit and High Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026.
 
It prohibits institutional, industrial, commercial and direct consumers from purchasing fuel through retail fuel outlets and requires them to source supplies through their own consumer pumps.
 
The move could create difficulties for micro and small enterprises that rely on diesel generator (DG) sets for backup power but lack dedicated fuel storage and dispensing infrastructure.
 
Most MSMEs operate DG sets with relatively small fuel tank capacities and do not possess Petroleum and Explosives Safety Organisation (PESO)-approved storage facilities. As a result, they may face challenges in procuring high-speed diesel for emergency power generation.
 
FISME Seeks Exemptions And Alternative Supply Mechanisms
Ajay Saboo, Managing Director, Kajay Remedies Pvt Ltd and Executive Committee Member,  FISME, said existing alternatives such as mobile diesel dispensers are often unsuitable for small enterprises as they typically supply large volumes requiring significant upfront expenditure and storage capacity.
 
The industry body is expected to submit representations to the Ministry of Petroleum and Natural Gas and the Ministry of MSME, seeking either an exemption for micro enterprises or alternative arrangements such as limited-quantity fuel purchases through self-declaration or small-volume doorstep delivery.
 
Small Enterprises Face Fuel Supply Uncertainty
Industry stakeholders warned that any disruption in diesel availability could affect MSMEs, particularly manufacturing and processing units operating in areas with irregular power supply, leading to production losses and potential spoilage of goods.
 
According to Neeraj Kedia, Member, FISME’s Central Executive Committee, larger enterprises requiring around 12 kilolitres of diesel continue to receive direct supplies from oil companies, but smaller units consuming only 500-1,000 litres per month are facing considerable uncertainty.
 
He said many petrol pumps are refusing to supply fuel, forcing some businesses to resort to stockpiling or other irregular arrangements to keep operations running.
 
Industry Calls For Clear Guidelines And Better Power Supply
Kedia urged the government to clearly specify procurement channels for small enterprises and noted that the issue has become more serious amid rising raw material costs and weak market demand, which are already putting pressure on MSME margins. He argued that India has adequate power generation capacity, but suffers from unreliable electricity distribution.
 
To address the problem, he suggested allowing MSMEs dependent on diesel generators to purchase fuel from retail outlets, while ensuring direct bulk fuel supplies for energy-intensive industrial units.
 
He also called for a more reliable power supply with fewer disruptions to reduce dependence on diesel-based backup systems.

FISME is likely to invoke provisions in the order that allow the government to exempt specific categories of consumers from its applicability.
 
(KNN Bureau)