India's telecom sector has sought an “urgent consideration” from the government to exempt it from the new restrictions on bulk diesel procurement at retail pumps, warning that the curbs could disrupt operations of mobile towers and impact service quality of users during power outages, according to industry executives and a letter seen by Mint.
“Any disruption in diesel supply directly affects DG (diesel generator) operations, potentially leading to outages impacting voice/data services, including emergency communications across the 1.3 billion subscribers,” the Digital Infrastructure Providers Association (Dipa) said in a letter on Friday to the department of telecommunications (DoT).
The association sought an "urgent consideration and early issuance of a clarification/exemption to avoid any risk to nationwide connectivity”.
The association, which represents major tower companies including Indus Towers, Ascend Telecom Infrastructure, Altius Telecom Infrastructure, flagged serious operational risks to telecom tower companies due to restrictions on diesel procurement.
Queries emailed to the DoT did not elicit any response until press time.
Government's rationale
The issue assumes significance amid disruptions to global supply chains due to the war in West Asia. This has led the ministry of petroleum and natural gas to issue the Motor Spirit and High Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026 on 11 June, which directed fuel retailers and oil marketing companies (OMCs) to curb bulk fuel purchases from retail outlets for periods of up to 90 days at a time.
The order has restricted industrial, commercial and institutional users from buying petrol and diesel from petrol pumps, and instead asked them to source their requirements from bulk sale points. Retail fuel station dealers have been directed to sell no more than 200 litres of diesel per customer or vehicle or in Petroleum and Explosives Safety Organization (PESO)-approved containers, a day.
The government said restrictions were needed to ensure equitable availability of petrol and diesel, prevent diversion and hoarding, and maintain uninterrupted fuel supplies at fair prices.
Under section 4 of the order, the government can exempt any consumer from all or any of its provisions.
Connectivity risks
To be sure, tower companies rely on diesel generators to maintain the network uptime during power cuts at telecom tower sites. They buy diesel at retail prices and pass on the fuel and power expenses to the telecom operators. The companies rely on their authorized logistics partners for sourcing fuel via retail outlets for last-mile delivery to a large number of geographical dispersed sites.
“It is a critical sector and any restriction on diesel supply especially during rampant power outages could risk the mobile phone connectivity,” an executive at a tower company said, warning of huge disruptions if the exemption is not allowed. “The issues related to power outages are already there in states such as Uttar Pradesh, Bihar, Madhya Pradesh and Odisha,” the executive said.
The issue of power availability during the peak demand summer season is an ongoing concern for tower firms, and has been flagged by the industry at multiple meetings with the DoT.
In the industry body's letter, the tower companies also sought permission for controlled procurement and transportation of diesel for telecom DG operations beyond the prescribed limits, subject to appropriate safeguards, auditability, and traceability mechanisms. They also sought direction to the OMCs to ensure uninterrupted and prioritized fuel supply to tower companies.
Indian Oil Corp Ltd. (IOCL) has already started instructing all retail outlet dealers to comply with the government regulations on the supply of petrol and diesel. Dealers are required to maintain detailed transaction records, actively monitor for suspicious activities such as split transactions designed to bypass the daily limits, and cooperate fully with inspecting authorities, as per an IOCL order by Lucknow branch.
On 25 May, OMCs increased the retail price of both petrol and diesel by over ₹2.50 per litre, marking a cumulative ₹7.5 per litre hike since 15 May. The price hikes are estimated to increase cost for infrastructure providers by ₹750 crore annually, as per industry estimates.